Removing disincentives to higher education and increasing enrolments among under-represented Australians have been identified as key ways to strengthen the university sector.
A major review, known as the Universities Accord, has outlined more than 70 recommendations for system-wide change in its interim report.
With "skills growth through greater equity" as the recommended goal of reforms, the panel presented several ideas to achieve this.
These included a universal learning entitlement which aimed to increase enrolments of Indigenous Australians, people from lower socio-economic groups, people with disability and those from regional and remote areas.
It also recommended changes to student fee contribution amounts and repayments and doing more to make campuses safer.
A national skills passport - enabling people to have their full range of qualifications, micro-credentials, prior learning, workplace experience and general capabilities recognised across the system - was also proposed.
In a speech at the National Press Club on Wednesday, Education Minister Jason Clare said he did not want Australia to be a country where opportunities were based on skin colour or parental wealth.
"This is a chance to change that, or at least to start to open that door a little bit wider, to make us a fairer country and a stronger one," he said.
The report recommended guaranteed funding for Indigenous students be extended to those living in cities.
Currently, guaranteed funding exists only for Indigenous students living in regional areas.
Mr Clare said the change could double the number of Indigenous students at university in a decade.
Ahead of the final report, the minister wanted to build consensus for reform among universities, unions, businesses and students.
He expected the panel to ultimately provide a timetable for action across the next five to 20 years.
The interim report presented five priority actions to address immediate issues facing the higher education sector aimed at growing student numbers and reducing inequity, which the government has agreed to.
Immediate measures called for greater certainty in university funding by extending the Commonwealth Grant Scheme, guaranteed to December 2023, into 2024.
Extending tertiary education access to rural and regional students and abolishing the 50 per cent pass funding rule, which disproportionately affects students from poorer backgrounds, also feature as priorities.
The rule was introduced as part of the Morrison government's job-ready graduates scheme and requires students to pass at least 50 per cent of total attempted units to remain eligible for fee assistance.
It's estimated more than 13,000 students have been forced to quit due to the rule.
National Tertiary Education Union president Dr Alison Barnes said the interim report was a good first step but she hoped the final report would address insecure work in higher education.
"Making changes to help universities to attract and retain staff must be centred on ending the insecure work crisis," she said.
"With two-thirds of university staff in casual or fixed-term employment, not tackling this is a massive risk for the future of higher education."
But Science and Technology Australia chief executive Misha Schubert said the report had "disastrously" missed a historic moment to recommend increased research investment in Australia.
“The accord's interim report has spectacularly missed the mark on research investment (and) that's an epic fail," she said.
"It squibs a once in a generation chance to set our nation on the path to prosperity by stepping up our investment in being first to bold breakthroughs."
The interim report is open for consultation until September 1 before a final report is handed down in December.
