Treasurer Scott Morrison has defended the government's push to bring down the university loan repayment threshold to $45,000.
Monday's mid-year budget update included a proposal to reduce the existing HELP threshold, when students need to start repaying their loan, from $55,000.
"More than half of university students' education is paid for by the taxpayer and then there are fees for which they can get low-interest loans and they should be paid back," Mr Morrison told Seven Network on Tuesday.
A quarter of the loans are never repaid and a third of degrees are never completed, he said.
Mr Morrison also rejected criticism of the decision to freeze university funding at 2017 levels for two years.
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He argued funding has grown over five years at about 15 per cent but costs per students have been running at 10 per cent
"We know that the institutions have been billing up a bit of a chest there," he told the Nine Network.
The Turnbull government had hoped to get a different package through the Senate but could not garner support.
"We wanted to have longer lasting reform," the treasurer acknowledged.
Universities Australia say the freeze will lead to fewer people having the chance to pursue higher education, while Labor insists it is proud of defending the sector against "unwarranted attacks".
