Warning Australia's higher education sector could slip behind comparable economies, rendering it less competitive, Mr Pyne said the reforms represented a "one off opportunity" to address structural funding.

"If we don't act, and act now, we risk (the) system falling into a downward spiral towards mediocrity," Mr Pyne told the House of Representatives.

"The reform bill gives effect to some of the greatest higher education and research reforms of our time."

The plan would broaden the range of institutions accessing federal funds with private sector providers funded to the tune of 70 per cent of existing universities, and funding extended to sub-degree courses.

But it comes with the catch of a 20 per cent cut per-student to Commonwealth funding sparking fears that institutions will dramatically increase fees per course to make up the shortfall and will also drop some courses seen as too costly to provide.

Student loans would also be more expensive, with the interest rate increased to the equivalent of the 10-year bond-rate.

Opponents argue that it will  prevent some young people from studying and  burden others with huge debts.

Vice-Chancellors have  said fees would rise by an average of 30 per cent but admit some hikes could be much higher.

Mr Pyne introduced his long-awaited reform package to Parliament on Thursday reiterating that change was vital, and that all institutions accepted this, even though there is disagreement over what form that should take.

While there has been some change to take account of consultations, Mr Pyne's package contains the main elements already known including deregulation to allow unis to charge whatever they like for degrees, while offering only those courses they deem fit.

He said reform could not be denied urging the Palmer United Party, which has declared it cannot support the package, to face the facts.

"Deregulation is the only way to respond to what students and employers want ... it is the only way to set our universities free to ensure they can deliver what they need.

"It is the only way to ensure Australia is not left behind."

"If we end the year without the reform, universities won't be thanking the Palmer United Party," Mr Pyne said.

South Australian Senator Nick Xenophon is not a supporter either and at least two others, Victoria's John Madigan and Ricky Muir, are both holding judgment until they have studied the legislation in detail.

The sector's peak body, Universities Australia, has been leading the charge for "full" deregulation of university funding arguing the status quo of declining federal funding without the flexibility of deregulation was untenable.

Its head, Belinda Robinson, described it as a "once in a generation opportunity to shape an Australian higher education system that is sustainable, affordable and equitable in serving the best interests of students and the nation".

"With budgets under pressure, governments faced with a myriad of competing priorities for public funding, and successive governments being disinclined to invest at the level that repeated independent reports have shown to be needed, full deregulation of higher education is needed," Ms Robinson said.

"Either the status quo of ongoing inadequate investment, or further cuts without deregulation will condemn Australia's great university system to inevitable decline, threaten our international reputation and make it increasingly difficult for universities to meet the quality expectations of our students."