University students will be forced to pay an average of double the existing fee to study at universities under the Abbott Government's proposed reforms to higher education, according to new modelling provided by Universities Australia (UA).

Belinda Robinson, the chief executive of UA - which represents the country's 39 universities - warns that measures in the budget threaten to encourage students to study overseas.

"We might start to see Australian students voting with their feet and in fact starting to consider international higher education providers," she told Lateline.

The UA modelling has shown that an engineering graduate working full time can "reasonably expect" to accumulate a debt of up to $119,000, which could take 26 years to pay off.

Under existing arrangements, that debt reaches less than half that - at around $49,000 - which is paid off at least eight years earlier.

Ms Robinson told Lateline that the Education Minister's claim that the budget reforms will mean students and taxpayers share the cost of university education 50-50 does not take in to account the fact that the new scheme sets no limit on what fees an institution can charge its students.

The students' contribution will be significantly higher than the Government's, if fees, as expected at some universities, reach the heights they are already set at for foreign students.

In his first budget speech last month, Treasurer Joe Hockey said the higher education sector was being held back and "couldn't compete with the best in the world".

Ms Robinson said it was not clear to Universities Australia that the Government's reforms will in fact deliver the best system in the world.

She pointed out that Australia already does "pretty well" by world standards.

Australia is already the third most popular destination for international students outside the UK and the US.

"We regularly have between five and six of our universities in the top 100 of the world rankings and we're voted by Universitas 21 as having the fifth best system in the world, so we do very well," she said.

The Government's plans to charge real interest on student loans for the first time may prove a disincentive for graduate mothers to return to the workforce after having children.

This finding by UA seems inconsistent with Prime Minister Tony Abbott's real wage paid parental leave scheme.

If the same aforementioned engineering graduate decides to work part time for six years while they raise a family and then return to work, they can expect to pay between $111,100 and $122,500 which will take about 26 years to pay off.

Under existing arrangements the debt is less than half that and, at $50,200, the debt would be paid over 19 years.

"If we're not careful what we will start to see is a situation where students are being deterred not only from participating in university study but in fact taking time out of the workforce to do things like have children because it will be such a financial burden for them once they re-enter the workforce," Ms Robinson said.

According to the UA modelling, a nursing graduate working full time accruing a debt at 4 per cent can "reasonably expect" to accumulate a Higher Education Loan Program (HELP) debt of up to $56,900, which will take up to 17 years to repay.

Under current rules, the debt would be paid off over 11 years and cost $23,400.

If a nursing graduate chooses to work part time and raise a family for six years then return to full-time work, that debt will rise 169 per cent (against current fees) to up to $66,200, which would take 22 years to pay off.

Education Minister Christopher Pyne hopes to change indexation arrangements on the Government's funding for tertiary institutions.

Instead of lifting the rate of growth in taxpayer contributions each year by an indexation figure that acknowledges the true costs of education, the Minister will index by the consumer price index.

For the universities sector, the decision to both reduce funding to the university sector and drop the rate of indexation for the Government's contributions represents another broken promise according to Ms Robinson.

"In the lead up to the election, we were given an assurance that a Coalition government wouldn't change the funding arrangements for universities or indexation," she said.

Universities Australia is calling on the Abbott Government not to rush through its changes to higher education funding.

Ms Robinson said it would be better if the Government adopted a more staged approach.

"Because there is a lot at stake and if we get this wrong it's going to be very, very difficult to turn back."

UA analysis also found universities would have to charge communications students almost double what they do now to make up the shortfall from the reduced Commonwealth contributions.

People wanting to study climate science would be charged 110 per cent more.

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