The Abbott government has ditched plans to hike interest rates for university students.
Education Minister Christopher Pyne is also actively considering other crossbench demands on his higher education overhaul.
Mr Pyne is dropping plans to charge real interest on student debts and charge no interest at all for five years for those graduates who take time out of work to raise children.
These are the first concessions Mr Pyne has given during the three months the changes have been before the Senate.
If the government can convince the crossbench to support its reforms it could get a significant victory in the Senate before the end of the week.
Plans to charge real interest rates on HELP debts have been widely condemned as the most unfair part of the government's proposals.
Critics include university vice-chancellors, most of whom support overall fee deregulation, and senate crossbenchers, including Family First's Bob Day and independent John Madigan.
"I do hope that the crossbenchers, all of them, are listening long and hard to the vice-chancellors of Australia," Prime Minister Tony Abbott told reporters.
Senator Madigan also wants interest on debts for new mothers and fathers halted.
Mr Pyne is considering a special fund to help regional universities adjust to the changes, setting the consumer watchdog to monitor fees and more targeted scholarships for rural and regional students.
The government's package includes deregulating university fees, expanding commonwealth funding to private providers and degrees below bachelor level, and cutting the per student funding level.
Legislation has been stalled in the Senate as Labor and the Greens staunchly oppose it.
It is due for debate on Monday.
"I don't presume to know what the final outcome will be but we are determined to deal with this matter one way or another in this final sitting week of the year," Mr Abbott said.
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