CANBERRA, Australian - Federal Education Minister Simon Birmingham has defended his government's plan to cut university funding and raise fees, saying that it will not affect the country's status as a desirable destination for international students.

Under the proposed changes, announced on Monday, university students studying the average four-year degree would be slugged an additional $1,500 to $2,700, while the overall amount cut from university funding would total $2.1 billion.

Also, once students have graduated and are earning a full-time wage, they will be required to pay back their loans if they are earning $32,700 - down from the current threshold of $41,500. This means more Australians will be paying back their higher education loans, freeing up more money for the government to spend elsewhere.

Following the announcement, some university vice-chancellors raised concerns that the changes would scare off prospective international students. Monash University Vice-Chancellor Margaret Gardner told the minister that it would be harder to sell the "quality" of its education in the wake of funding cuts.

Despite the concerns, Birmingham said the measures would benefit universities by boosting their long-term sustainability.

"We believe they can absorb such an efficiency dividend without it having any detrimental impact on (universities') bottom lines or teaching or learning," Birmingham said.

He said the changes would mostly affect Australian citizens, and Australia's reputation as a desirable destination for international students would remain untouched.

"International education is Australia's third largest export, valued at $16.6 billion and supporting around 130,000 jobs. We must nurture and grow our reputation for providing quality education to Australians and to the world," Birmingham said.

"We must continue to be a beacon for the best and brightest from around the globe - whether they are PhDs, post docs, academic staff or undergraduate students. We welcome and want to partner with the best in the world."

The changes will be officially floated in the federal budget, to be released on May 9, but will require the support of the crossbench to pass through Parliament.