Education Minister Dan Tehan announced the government's performance-related funding scheme, which would put an end to the two-year freeze on university funding increases, for those that perform well across four specified areas.

One of those areas is the enrolment of Indigenous, disadvantaged and rural students - a move immediately welcomed by La Trobe and Charles Sturt universities, which have campuses on the Border.

Under the scheme, universities will also be judged by the employment rates of their graduates, dropout rates of domestic first-year students and student satisfaction with teaching quality.

IN OTHER NEWS:

A statement issued on Wednesday by La Trobe University said the organisation was pleased with the end of the freeze on funding for university places.

"We broadly welcome the performance-based funding approach proposed by the federal government today - especially around the important factors of employment outcomes, student experience and access to higher education for all Australians," the university stated.

"The inclusion of measures relating to rural, low socio-economic status and Indigenous groups is especially welcomed by us, given our rural and regional footprint.

"We are now working through the finer detail of the new policy and will be making constructive contributions to the minister and department around its effective implementation."

CSU Vice-Chancellor Professor Andrew Vann said the four performances measures were "encouraging".

"These are criteria in which Charles Sturt boasts an enviable record," he said.

"We are looking forward to getting more detailed information on the proposals for calculating the targets and indicators."

The performance-based funding was based on recommendations in an independent report written by an expert panel, chaired by the University of Wollongong Vice-Chancellor.

Professor Vann commended Mr Tehan for taking feedback from universities before finalising the scheme.

"Charles Sturt would like to thank the panel of five expert vice-chancellors for their work in devising the performance measures, and whole-heartedly endorses their overall approach, which encourages a focus on the same social outcomes which are closely aligned with Charles Sturt's mission," he said.

Mr Tehan said there needed to be incentives for performance and transparency.

"While we have a world-class higher education system, it needs to be stronger, more sustainable and fit for purpose," Mr Tehan said.

"Performance-based funding amounts will grow in line with population growth of 18 to 64 year olds, an increase of around $80 million next year."