Universities will have unfettered freedom to set their own fees under the most radical shake-up to higher education funding since the introduction of HECS 25 years ago.

While fees in some courses may fall, the cost of a degree from prestigious universities is expected to soar when government caps on course costs are scrapped in 2016.

Mr Sengupta said the cost would prohibit people in regional areas who also had the added burden of accommodation and travel costs. 

“The deregulation in fees could mean some course go up to $200,000,” he said. 

“On top of that you’re paying back more for a degree because of the interest rate hike.”

Graduates will pay an interest rate of up to 6 per cent on their student loan - up from 2.9 per cent currently. This will affect all students from 2016, regardless of when they started their degree.

The federal government’s contribution to degree costs will decline by an average of 20 per cent from 2016 as students take on a greater share of the cost of their education. The changes will not affect current students until 2020.

He said it would be difficult for universities like Charles Sturt University to attract students if there was no cap on price because it was not in the top 100 universities. 

Mr Sengupta lived on campus and he said most of the students on campus lived off youth allowance. 

He said he was worried for friends in other courses who would be facing potential unemployment straight out of university and no option to go to Newstart.