Top unis don't like partial deregulation

The nation's top universities have cautioned over the Turnbull government's proposal to partially deregulate university courses.

The option, outlined in the budget earlier this year, would allow higher education institutions to set their own fees for a small portion of "flagship" courses.

But the prestigious Group of Eight - which includes the University of Sydney, the University of Melbourne and the University of Queensland - is worried it could lead to a two-tiered system where some courses are available and others are out of reach.

"There is a risk that such a proposal could distort incentives for universities and entrench a two-tiered system of university education between flagship courses and others both between and within universities," it said in a submission to the government.

They're also uncertain about the impact on poorer students and how flagship courses would boost the participation of those from low socio-economic backgrounds, rural areas and indigenous backgrounds.

Education Minister Simon Birmingham has previously said the government would pursue partial deregulation "if the merits stacked up".

He's argued there should be some scope for universities to innovate and invest to deliver world-class courses.