The Australian National University, meanwhile, has denied any intention to raise fees for its degrees to $200,000, saying it had not yet begun modelling any fee rises.

CIT deputy chief executive Jenny Dodd said the budget contained a number of initiatives which would make it financially easier for students to earn a vocational qualification in the ACT.

First, CIT students studying for higher education qualifications would now be eligible for the Higher Education Loan Program, where previously they had to pay commercial rates.

Ms Dodd noted that the playing field would further be levelled from next year when a National Partnerships Agreement would see income-contingent loans extended to vocational sub-degrees.

She downplayed the potential competition between CIT and the UC for the sub-degree market, saying the CIT would continue to concentrate on vocational skills while UC’s offerings would be geared to pre-university and articulation courses.

CIT particularly welcomed new financial support for apprentices who will now be eligible for trades support loans of up to $20,000 over four years to assist with living and learning expenses.

While students would need to pay the money back, those who completed their apprenticeship would receive a 20 per cent discount as an incentive to finish.

CIT student numbers traditionally rose during economic slowdowns, with Ms Dodd noting many people would seek to earn qualifications if they could not secure a job.

Similarly, the $10,000 employer incentives to hire older workers was likely to see mature-aged students seeking new skills.

''We are really happy to see the equalisation of student access to loans and it levels the playing field for students across the board,'' Ms Dodd said.

She agreed with UC vice-chancellor Stephen Parker that the higher education landscape would change across Canberra significantly.

Professor Parker on Wednesday reiterated his belief that the UC would encroach on CIT’s market share as a result of the budget initiatives.

In terms of the national interest, Professor Parker said the education budget, which has uncapped university fees and withdrawn Commonwealth support for courses by 20 per cent, was deplorable.

''It is Whitlam in reverse. Whitlam followed the trend of Menzies' second term and removed student fees altogether. Now fees may return to proportions not seen since World War II, albeit with a loan scheme to cushion the blow,'' he said.

He predicted the Australian National University and other Group of Eight elite institutions would raise their fees to several hundred thousand dollars for a degree.

But in an email to all staff and students on Wednesday, ANU vice-chancellor Ian Young said: ''I think enormous increases that would see the sudden introduction of $200,000 degrees are highly unlikely.''

Professor Young has called on staff and students to make contributions to how the ANU would respond to the budget measures over the coming weeks.