The Abbott government has ditched plans to hike interest rates for university students.

Education Minister Christopher Pyne is also actively considering other crossbench demands on his higher education overhaul.

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Mr Pyne is dropping plans to charge real interest on student debts and charge no interest at all for five years for those graduates who take time out of work to raise children.

These are the first concessions Mr Pyne has given during the three months the changes have been before the Senate.

If the government can convince the crossbench to support its reforms it could get a significant victory in the Senate before the end of the week.