UNIVERSITIES are becoming increasingly nervous about the increased regulatory burden that will be placed on them by the federal government's new streamlined student visa processing arrangements.

The HES understands that some universities have "baulked'' at the potential obligations that may be placed on them if they sign up to the new arrangements.

But Queensland University of Technology's deputy vice-chancellor (international), Scott Sheppard, said that while negotiations were complex, there was good will on both sides to secure an agreement that should help boost second semester enrolments.

Talks are close to a final stage, he said.

Mr Sheppard is chair of the working group advising Universities Australia on the negotiations with the Department of Immigration and Citizenship.

He said the sector was keen to ensure that the obligations placed on universities aren't so onerous as to undermine the intent of the changes. He said universities face a deadline to decide whether to sign up for the scheme before the end of the month.

The intent is to recognise that universities have a good track record as low-risk providers.

Last week major university feeder college provider Navitas warned that uncertainty over how the streamlined system will actually work is dissuading agents.

"All the evidence we have is that agents are not prepared to send students to Australia while there is uncertainty,'' chief executive Rod Jones said.

He said the government's response to the Knight review was welcome but that the "devil is in the details'' and that the detail was proving "complex.''

Mr Sheppard said the international market outlook for universities was negative with numbers expected to be flat at best. Other indications suggest continuing declining enrolments. He noted that the high Australian dollar, which hit US$1.08 this week and rising competition from other destinations such as the US were continuing to weigh on the market.

Mr Sheppard also said that what growth there had been in the university sector over the last two years had mainly come from students already onshore, with numbers expected to contract in the near future.

A spokesman for the immigration department said negotiations are ongoing and the department will continue to consult with the sector. However, he said there is a deadline by the end of the month for universities to opt in to the arrangements so that their application can be assessed.