Australia's universities are expected to earn more than Aus$150 million (Pounds 75 million) this year by charging postgraduate students course fees.
Since 1989, when universities were allowed to set fees, there has been a steep rise in enrolments and the number of fee-paying courses.
Last year, 16,000 students or one in four of those undertaking postgraduate coursework programmes paid fees - an 85 per cent rise in three years. Universities offered 900 fee-paying courses in 1994, up from about half that figure the year before.
Following a federal inquiry into fee-paying courses, universities will be able to increase the number and level of charges in what has become a totally deregulated market.
An inquiry report predicts that over the next three years the number of postgraduate students paying fees will jump 64 per cent but total postgraduate numbers will rise only 11 per cent.
The independent committee running the inquiry rejected widespread criticisms by student groups that fees deterred able but poor students. The report says there is no evidence of students suffering major disadvantage, although there might be a problem for women on business courses.
But the report says universities should develop equity plans for fee-paying students and their performance should be monitored. A loans scheme might be desirable if the fee-paying market developed further, especially for courses required to enter professions.
Announcing the report, federal education minister Simon Crean said the committee had provided a reasoned and informed discussion of the impact of deregulating postgraduate fees. Action would be taken to ensure universities included participation in fee-paying courses as part of their equity plans.
Mr Crean established the inquiry last November, following Labor Party calls for a review of deregulation.
This followed strong criticisms by the Council of Australian Postgraduate Associations about the quality and rapid expansion of fee-paying courses. In a series of increasingly bitter attacks over the past four years, the council complained that the drive for more income has resulted in lower standards.
Last year, the council accused universities of misleading students and passing off cobbled-together undergraduate courses as postgraduate degrees. It warned of universities accepting fee-paying students who lacked undergraduate degrees.
The National Tertiary Education Union argued deregulation had removed most checks on fee-paying courses.
But committee chairman Gordon Stanley said it was up to universities to monitor their own standards. He said there would be no support for setting up a bureaucracy to check on the way universities ran courses.
"Universities are self-accrediting institutions, responsible for their own academic standards," he said. "If they do not exercise that responsibility, I could envisage their academic competitors would soon make the point that they were not up to scratch."
The inquiry found the average fee for postgraduate courses last year was Aus$7,160, although this figure is inflated by the large fees - up to Aus$45,000 - charged for certain MBA programmes.
The report shows there are strong incentives for universities to charge fees. Under current arrangements, the government funds postgraduate places at an average of $12,500 per student. If a university includes fee-paying enrolments in its funded load, it receives the government's contribution and the student's fee.