Students will have to bear more tuition fees if they plan to study in Australia.

The Australian government has unveiled the federal budget for fiscal year 2014, which plans to deregulate fees from 2016. The move will inevitably raise the cost of higher education.

The fee rise will affect undergraduate students as well as masters and PhD students.

For those who have already commenced their studies, existing arrangements will remain until the end of 2020.

The move aims to rein in deficits and allow Australian universities to compete with "the best in the world," according to the government.

The budget also slashes government funding for university courses by 20 percent, while giving more state support for those studying at vocational and private colleges.

Meanwhile, students will have to repay their student loans at a lower income threshold and with real interest rates up to a maximum of 6 percent.