Demand for 2021 is already soaring, with the estimated 20,000 year 12 students who usually defer university now less likely to take a gap year because of travel restrictions and the poor jobs market.

The rising unemployment rate is also driving demand 2014 in a recession, many unemployed people typically turn to universities.

"We are facing the biggest employment challenge since the Great Depression," Mr Tehan said.

"And the biggest impact will be felt by young Australians. They are relying on us to give them the opportunity to succeed in the jobs of the future."

 

Subjects in nursing, psychology, English, languages, teaching, agriculture, maths, science, health, environmental science and architecture will be cheaper. The Government will increase its contribution to the cost of these classes, so students can expect to pay between $3,700 and $7,700 per year.

However, students enrolling to study law and commerce will have fees raised by 28 per cent.

For humanities courses, fees will more than double, putting them alongside law and commerce in the highest price band of $14,500 a year.

Critics of Australian universities decry their increasingly business-oriented focus, and this policy shift will add to those concerns.

Humanities staff will also worry about job security as a $45,000 arts degree will likely see some students change their plans.

The Minister says this will give the taxpayer best value for money.

"Students will have a choice," Mr Tehan said.

"Their degree will be cheaper if they choose to study in areas where there is expected growth in job opportunities."

The Government says its priorities have been defined by pre-pandemic modelling showing 62 per cent of employment growth in the next five years will be in health care, science and technology, education and construction.

The policy aims to increase the graduate employment rate of 72.2 per cent, which is lower than for vocational education, at 78 per cent.

Students studying to be doctors, dentists or vets will see no change in the cost of their degrees, which are about $11,300 a year.

The Government says no current student will pay increased fees. Students enrolled in courses where costs are going up will have their fees frozen.

However, students enrolled in courses that are getting cheaper will be able to take advantage of the fee reductions from next year.

The Government says its priorities have been defined by pre-pandemic modelling showing 62 per cent of employment growth in the next five years will be in health care, science and technology, education and construction.

The policy aims to increase the graduate employment rate of 72.2 per cent, which is lower than for vocational education, at 78 per cent.

Students studying to be doctors, dentists or vets will see no change in the cost of their degrees, which are about $11,300 a year.

The Government says no current student will pay increased fees. Students enrolled in courses where costs are going up will have their fees frozen.

However, students enrolled in courses that are getting cheaper will be able to take advantage of the fee reductions from next year.

The National Union of Students (NUS) says the lowered fees will give some students a "positive opportunity", but at the expense of hundreds of thousands of others whose degrees are not deemed "worthy".

"Universities are not job factories and tailoring fees around that premise will hurt our sector in a time where we are already facing billions of dollars lost and hundreds of staff cuts," the union said in a statement.

"We need funding, not attacks on students.

"Being a student should not be a debt sentence, but the Government has decided to force tomorrow's workers into a lifetime of further debt."

National Tertiary Education Union (NTEU) president Alison Barnes said "gouging students" won't fix a "funding crisis".

"The future of Australian research and learning demands a substantial funding package, not a cynical attempt to gouge certain cohorts of students for more money," Dr Barnes said.

"Dan Tehan has effectively told students studying humanities, law and commerce that they should fund the cost of the pandemic. This is unconscionable."

Universities Australia has been approached for comment.

Susan Forde, from Griffith University's journalism department, was among a number of academics to attack the plan on Twitter, calling it "another blow to the humanities when we need to understand our world more than ever".

But Catherine Friday, education lead at global accounting firm Ernst and Young, said the change would be good for the economy and jobs.

"As public education delivers both public and private good, there is a strong nudge here towards maximising both, and discouraging ongoing high enrolments in courses like law, where demand for lawyers isn't growing at anywhere near the pace of the numbers of new law graduates every year," she said.

The announcement comes amid strong but fruitless lobbying from universities for an extra bailout, after it estimated a revenue decline of between $3 billion and $4.6 billion due to international students not arriving.

According to the Education Department, 276,498 students were offered a place at universities this year, so the extra 39,000 Commonwealth-funded places is an increase of about 14 per cent.

Government funding for student places will also return to being increased in line with the Consumer Price Index (CPI), ending what some universities considered a freeze on funding.

It is estimated this will cost the Government around $550 million, with some of the costs offset by reduced spending in the non-priority courses.

By 2030, the Government hopes to have an extra 100,000 places.

Already battling with a pandemic, some students have had the additional worry of whether they would get a spot at university next year.

Western Sydney year 12 student Amelie Aiko Loof is nurturing her dream to become a gynaecologist in the science lab of the Our Lady of Mercy College in Parramatta.

Fascinated by the human body and motivated to help women through their pregnancies, Amelie's university goal has long been locked in and while her fees will not rise, her plan to "find herself" overseas is on hold.

"I was hoping that I would study in Germany overseas, but before that obviously I would take a few months of travel, and kind of see the world. Maybe go see Europe and America as well," she said.

She has now applied to study medicine at the University of Sydney.

At least a dozen of her friends are grappling with the same dilemma, and in some states university applications are already double what they would usually be.

It is the same story right across the country, where students have altered their plans and now also need to consider the Government's fee cuts or hikes.

"I do think there will be more competition than usual to get into the course that people want," Ms Loof said.

"That is another whole added stress to the pandemic for us this year."