The government remains committed to making university students pay more for their degrees, Education Minister Simon Birmingham says.
Senator Birmingham is consulting stakeholders after deferring a plan until next year for a 20 per cent cut in federal funding to universities and allowing them to raise fees paid by students.
The plan has twice been rejected by the parliament and details of the revised package are expected to be unveiled in the May 3 budget.
Senator Birmingham told Sky News on Monday he wanted to "refine and improve" the original plan by former minister Christopher Pyne.
"(But) the growth in higher education spending over the last 20 years has essentially gone at double the rate of growth of the economy, so that is not a sustainable financial trajectory," he said.
He said the original 20 per cent cut had only ever been "deferred" for 12 months.
"This is not just a funding cut - it is a reform program," he said.
"We are not taking away from universities in terms of what they overall have to spend but there is an argument to say you need to have a look at the balance of what students contribute and what the government contributes."
He said Australia had one of the most generous student loan schemes in the world.
