The sector has become a two-track system with record profits for some and large deficits and job losses elsewhere, Western Sydney University vice-chancellor George Williams said in an essay published on Friday.
The constitutional lawyer, who was a pivotal figure in the failed voice referendum, said students were carrying a heavy financial burden and being left in a financial hole after graduating.
"The $51,000 arts degree is just so unfair and wrong for a group that often earns the lowest salaries," he said.
"Then we're loading them with debt and then they can't afford a house. They're not getting a fair go."
A NSW parliamentary probe examining the scandal-plagued tertiary sector has put University of Technology Sydney vice-chancellor Andrew Parfitt in the hot seat.
The university is one of six in the state undergoing restructures the union estimates is putting 1500 jobs on the line.
"We spend roughly $40 million a year on consultancy out of a budget which is over a billion dollars," Professor Parfitt told the committee.
"We have heard the issue that people are concerned that this may not be the most appropriate use of all of the money."
But he defended the spending based on needing technical expertise that could not be drawn upon internally.
The workplace safety regulator took the unprecedented step in September of forcing UTS to pause plans to cut 400 jobs - about 10 per cent of its workforce - in the hope of saving about $100 million.
Labor MP Anthony D'Adam hammered the university boss for being part of a governance structure that was unaccountable.
"Who are you actually accountable to if you're only accountable to people that you appoint?" he said.
Prof Parfitt said international student fees were the main revenue drivers for universities but post-COVID-19 pandemic limits on student visas made it hard to predict the financial impact on UTS.
"There's always been that uncertainty in the past, in the future - that's the job of the chief executive officer - to appraise the uncertainty," Mr D'Adam countered.
"If you get it wrong, then ultimately you should be held accountable ... it seems that in your position, there are no consequences."
Pressed by inquiry chair and former UTS academic Sarah Kaine on why he should keep his job, Prof Parfitt said the university's financial shocks were due to policy decisions out of his control.
An academic from Macquarie University, who requested anonymity for fear of repercussions, said their community felt they had "a target on their back".
The university was also slapped with a workplace safety notice in October for its plans to cut some 60 positions to save $15 million.
"Academics are terrified to challenge bad decisions because our jobs are on the line," they told AAP.
"The cuts are gutting courses and chilling academic freedom."
Study hubs for aspiring students from regional areas and the outer suburbs of major cities will be established under a $67 million federal commitment.
They will have a chance to attend university through an extra 9500 places.
The additional places, to be allocated for 2026 by the Australian Tertiary Education Commission, will mark 4.1 per cent growth on 2025 numbers.
Nine out of every 10 new jobs in the next decade will require post-secondary qualifications, with almost half through vocational education pathways.
Education Minister Jason Clare noted half of Australians in their 20s and 30s have a degree, but numbers were lower in outer suburbs and regions.
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