Fee deregulation could fund scholarships at Sydney uni

FEDERAL Education Minister Christopher Pyne has backed initiatives of some universities to use funds raised through fee deregulation for more scholarships.

The University of Sydney on Monday announced it would use the proceeds of extra fees raised under the deregulated system to fund an extra $80 million of scholarships.

Vice-chancellor Dr Michael Spence said the funds would double the university's total scholarships to $160 million for students with the "greatest financial need".

While Dr Spence would not go into details of how big the windfall from deregulation would be for his university, he told ABC Radio on Monday it would be in the "hundreds of millions".

Mr Pyne said such initiatives were "exactly the sort of expansion of opportunity and equity that the government's reforms will make possible".

Despite concerns about the effects of higher fees on disadvantaged and lower income students, Mr Pyne said the university's program would allow more students from such backgrounds to study.

But Labor's higher education spokesman Senator Kim Carr said if the deregulated fees were so fair, there would be no need for scholarships.

He said under the government's proposals, there was a "real prospect" of "wealthy Group of Eight universities" quickly amassing "multi-million dollar funds derived from higher tuition fees and crippling student debt".

"Several regional vice-chancellors told the Senate's higher education inquiry that those funds would be used to poach students from other universities," he said.

"It is a recipe for elitism because the market power of elite institutions would be entrenched."

Mr Pyne is hoping to convince crossbench senators to pass the government's higher education reforms before the end of this year.

But with just two and half weeks left, and most crossbenchers, Labor and The Greens opposed to the bill, that prospect seems increasingly unlikely.