Uni sweeteners to cost budget $3.5b

The cost of watering-down higher education reforms will smash a $3.5 billion hole in the Abbott government's budget.

And that amount could get even bigger, with Education Minister Christopher Pyne ready to negotiate further concessions.

Mr Pyne is certain his "inevitable" reforms will pass parliament early in 2015 after introducing an amended version of legislation rejected by the Senate.

The government's has abandoned one of the most controversial measures - increasing interest rates on student debts.

It will also stump up $100 million for a three-year adjustment package and an unspecified amount for scholarships at regional universities.

There are also plans to freeze interest on debts for new parents and explicitly rule that domestic fees can't exceed what international students are charged.

In total, the changes save the federal budget $451 million over four years.

Its previous plan would have saved $3.9 billion.

Universities Australia doesn't believe Mr Pyne's concessions will be enough to win their support, let alone the Senate.

Universities have given conditional support to deregulation, but they don't like the plans to cut per-student funding by 20 per cent.

That hasn't changed in the new legislation.

Regional universities are disappointed the structural adjustment fund is only a third of what they wanted.

Mr Pyne told parliament he's open to further negotiations and believes he can win over the six Senate votes the government needs.

"I've never been against a battle," he told reporters.

"It's inevitable reform; it will pass the Senate at some stage."

The changes are still due to start on January 1, 2016.

Opposition Leader Bill Shorten told a special caucus meeting Labor didn't need the eight summer weeks "to review these rotten offerings".

Labor is still warning of $100,000 degrees, despite Mr Pyne insisting his interest rates concession would totally obliterate the opposition's "scare campaign".

Palmer United Party senator Glenn Lazarus, who blasted Mr Pyne for inundating him with text messages seeking his support, said PUP still opposed the changes.

Independent senator Nick Xenophon wants more time to consider the government's concessions.

While he opposed the initial bill, he believes the higher education system isn't sustainable in the long term without changes.

"But this is a radical change that was never put to the people," he told reporters.

"Once you've brought about these changes there's no going back."

WHAT'S IN THE NEW BILL?

* Saves $451 million over forward estimates (previous bill would have saved $3.9 billion)

* $100 million over three years to help universities who have trouble increasing revenue

* Government-funded scholarships to support students at regional and outer-metro universities

* Interest rates on HECS-HELP debts stay at consumer price index level

* Five-year freeze on interest charges for debts of new parents who stop work

* Guarantee domestic fees can't be higher than what international students pay

* ACCC to monitor for price gouging

* Deregulate university fees

* Expand commonwealth-supported places to private providers and degrees below bachelor level

* Universities that lift fees must put 20 per cent of increase into scholarships for disadvantaged students

* HELP debts start to be repaid when graduate earns $50,638 or more

* Removes FEE-HELP and VET FEE-HELP loan fees

* Allows universities to charge post-graduate research students annual fees of $1700 or $3900