The Department of Education has admitted students have had a "muted" response to past fee changes, as the Morrison government attempts to use price signals to drive enrollments in priority areas.
Education Minister Dan Tehan last month revealed the government would slash course fees for students studying subjects such as English, science and maths in order to get more people into those degrees. Students studying courses like humanities and law would see their fees rise.
Department of Education deputy secretary of higher education, research and international, Rob Heferen told a Senate inquiry on Tuesday it was not yet clear how many students would change their course preferences because of the fee differences.
Mr Heferen also said it was unclear whether the changes would have the opposite effect and incentivise universities to try and entice more students to study the high fee-paying courses.
"Whether universities will do that and whether students will do that it's a matter of preference for the students and that's a very hard thing to predict," Mr Heferen said.
However Mr Heferen said students have had a "pretty muted" response to past fee changes.
"There would definitely be some students out there who would say 'what are the financial incentives I'll face when I finish' and do that - absolutely no question. How many? Don't know," Mr Heferen said.
Mr Heferen suggested because the proposed fee changes were larger than past ones, there could be a larger response.
"Will it be significant? Think so. When will we know? When we actually see what the enrolments will be," he said.
Mr Heferen also refused to say whether the department had recommended the changes to the minister.
"That goes to a matter of policy which is a matter to keep internal to the government and what matters is what the government has actually announced," Mr Heferen said.
The changes have drawn widespread criticism from the sector.
Dr Alison Barnes from the National Tertiary Education Union was sceptical that the fee hikes would induce the desired response.
"It doesn't make sense sending price signals to students in a system that was designed to remove price as a consideration for students," Dr Barnes said.
The union's Dr Terri Macdonald said the students who would be responsive to price signals were mature age or Aboriginal and Torres Strait Islander students.
"f you've got a student who is a mature age student, and they're tossing up between social work and nursing, you know, even though we need both, the reality might be that they might go into nursing, which then is detrimental for the social work side of things," Dr Macdonald said.
Meanwhile universities also say the Commonwealth needs to step in and support international students, with hardship funds set up across the sector almost tapped out.
The university sector has been hard hit by the coronavirus pandemic, with international border closures causing a collapse in international student revenue.
Universities Australia chief executive Catriona Jackson told the Senate inquiry more than 3000 jobs had already been lost in the sector, with up to 21,000 at risk by the end of the year.
"That is something that should make your blood run cold," Ms Jackson said.
Without international students, universities were expecting a hit of between $3.1 billion and $4.8 billion this year alone.
"Over the next four years, we conservatively estimate $16 billion is the hit that universities will face. And this is in relatively good circumstances. This is pretty optimistic. It could well be significantly worse," Ms Jackson said.
Ms Jackson said the Commonwealth should offer no-interest loans to universities to help bridge the revenue gap.
The federal government should also chip in to support international students.
"We were keen for the Commonwealth to join with the states and territories to assist universities with those hardship cases," Ms Jackson said.
"Universities are getting to a stage where they are almost out of money for this sort of assistance, and obviously there is going to be hardship to come."