The government wants universities to focus on reopening campuses to domestic students as the sector warns of the dire financial impact of the coronavirus pandemic.
The higher education sector has been hit hard by a drop in international students as the pandemic led to border closures.
The federal government's early move to stop people coming from China was crucial in controlling the virus but damaging for the sector, with that country the largest source of international students to Australia.
New modelling by Universities Australia, released on Wednesday predicts the sector could lose $16 billion in revenue between now and 2023.
Some $12.3 billion of this is down to lost international student fees.
"We can't pretend that won't have a big impact," UA chief executive Catriona Jackson said.
"Not only does that revenue support the staff and facilities to educate the next generation of skilled workers, it also pays for much of the research and innovation that keeps Australia internationally competitive."
The organisation is understood to have underscored the impact of these losses on research during a meeting with Education Minister Dan Tehan on Wednesday.
The minister said after the meeting the government and the sector were working constructively to minimise the impact of the virus.
"Our priority is the further reopening of campuses for face-to-face learning for domestic students and the 80 per cent of international students already in the country," Mr Tehan said.
"We want as many students as possible to enjoy a campus-rich experience in a COVID-19 safe way in semester two this year."
He cited financial data showing nearly half the revenue for the nation's 39 universities came from commonwealth funding - which the government has promised to maintain at expected levels even if there is a drop in domestic student numbers.
Nearly 87,000 international students enrolled at Australian universities in first semester found themselves stuck outside the country after travel bans came in, plus another 35,000 destined for vocational education and training classrooms.
But universities say nearly half the new intake of students each year - at least 84,000 - begin their studies in second semester, which is about to commence.
Australian Associated Press