Major cuts to education spending are expected to feature in the May federal budget, as a report from the Parliamentary Budget Office (PBO) reveals the government expects to write off $11.1 billion in unpaid student loans by 2026.

Education Minister Simon Birmingham has renewed his calls for reforms to the sector - deregulation and a 20 per cent cut to student funding are still Coalition policy - but Charles Sturt University deputy vice chancellor Toni Downes said any changes will need to maintain equitable access for disadvantaged students.

"The government is facing some challenges around balancing one policy - which has enabled the uncapping of places - and a budget framework that says the costs in higher education are increasing at a rate that they argue is not sustainable," Professor Downes said.

"The government's plan to just deregulate is a very blunt instrument and it could lead to a real reversal in the rate of rural, regional, aboriginal and low-SES [socio-economic status] students attending university. And that's not good because we want rural and regional Australia to be innovative as well."

Since 2009, taxpayer funding of university students has grown at almost twice the rate of the economy, with Commonwealth-supported places in higher education growing by 59 per cent (compared with nominal GDP growth at 29 per cent). "This report from the PBO and many others all highlight that there are real sustainability pressures in the higher education budget," Minister Birmingham said.

"Projections show that costs will continue to increase dramatically... I welcome all ideas from the sector, experts and students on how to make student funding sustainable as we continue to consult widely on higher education reform."

Suggestions of lowering the threshold at which students begin repaying their debt; raising current fee caps; and recovering HECS from deceased estates; should all be thrown in the mix, Professor Downes said, but equity must remain at the forefront of reforms.

She said that if Australia hopes to be the innovative nation Prime Minister Malcolm Turnbull envisages, the higher education sector needs more funding, not less.

"The health of our rural and regional communities requires that we lift education attainment and rates of higher education right across regional Australia," Professor Downes said.

"For Australia to be a clever and innovative country we need more qualified people to attend university and therefore that will cost the nation more.

"It is of the utmost importance that we lift the higher education but also the participations rates...if we want those communities to also benefit from an innovative and highly-skilled workforce that is competitive."