The Turnbull government will freeze the amount it pays to universities for two years, before moving to a competitive system in 2020 with funding increases capped at the growth rate of the working age population.

A University of Wollongong spokesman said the changes will present some challenges.

But he said UOW has for some months ‘’been modelling potential funding reform options in anticipation of a likely announcement by Government in today’s Mid-Year Economic and Fiscal Outlook (MYEFO) statement’’.

‘’The funding freeze announced today represents a significant funding cut that will present challenges for UOW—along with the rest of the higher education sector—but is within the range of what the University had anticipated and been preparing for,’’ the spokesman said.

‘’Although the University is concerned by the reduced student loan repayment thresholds, which will mean graduates have to begin repaying their student loans sooner after graduating and starting their careers, UOW is pleased current student co-payment arrangements remain unchanged.’’

Under the changes, students would have to begin repaying their student loans when they earn $45,000 - instead of $52,000.

‘’The University will continue examining the cuts in more detail over the coming weeks to determine their impact and what measures may be necessary in response.

‘’Despite these changes, our focus will remain on helping our current and future students enrol and successfully complete their tertiary qualifications.’’

Read more: Mid-year budget update: Universities hit with $2.1 billion in cuts and end of demand-driven system