Northern Ireland should link in with controversial proposals for variable university tuition fees, the Department of Employment and Learning has said.
University fees are to be introduced in England in two years
The consultation paper, revealed by the Northern Ireland Office minister Barry Gardiner on Thursday, does not include any other proposals for third level education in the province.
The rules on university fees and student grants are made by the department.
The plan would bring the maximum cost of a three-year degree from £3,500 to £9,000.
However, the government is keen to point out that the fees are payable after a student graduates and is earning a salary higher than £15,000.
The department insists this is a proposal for consultation and says it sees no alternative to tying in with England, assuming the new system is introduced in universities there in two years' time.
It says that otherwise, Northern Ireland would end up subsidising English universities by paying for the many local students who opt to study there, while the two local universities would still be bound by the current lower tuition fees.
Mr Gardiner, who became the new Minister for Employment and Learning following a cabinet re-shuffle last week, said universities and colleges providing higher education needed the extra investment which these proposals would bring.
He said if they could not raise the extra funding, it would lead to downgrading of the provision in the province.
Student leaders say they will be lobbying politicians and the public to prevent the proposals from being introduced in the province.
A House of Commons vote last Wednesday narrowly approved plans to allow different universities in England to charge varying fees up to £3,000 a year for a range of degrees.
Queen's University Belfast says the same system must be brought in for Northern Ireland, if local universities are not to suffer.
They fear a shortfall in funding if Northern Ireland stays with the current system of lower fees paid while studying.
Vice-chancellor of the University of Ulster, Professor Gerry McKenna, welcomed the "reversal in the decline of public investment" in higher education.
However, he expressed deep concern that the proposals would lead to "a two-tier system based on affordability and not academic ability".
"We feel that university students should contribute towards their education because of the many benefits of graduate status," he said.
"However, we are deeply concerned that the proposals as they stand replicate the defects of the widely criticised higher education funding proposals for England."
Sinn Fein assembly member Michael Ferguson said any plans to introduce top-up fees in the province would create a university marketplace and discourage people from disadvantaged backgrounds from taking up university opportunities.
"Tuition fees should be abolished and the student loan should be replaced with a proper maintenance grant," he said.
Ulster Unionist spokeman on employment and learning Esmond Birnie, said the education funding system needed to be changed.
"We need to design a system of funding here in Northern Ireland which allows all with ability to study at university whilst also recognising that there are other high priority demand on limited public expenditure," he said.
SDLP deputy leader Alasdair McDonnell said he was angry at the minister's decision.
"Anyone who seriously suggests that charging people even more money to go to university will encourage more people to go is out of their mind," he said.
"The threat of debt is the biggest single obstacle to university entrance in the north."
Alliance councillor Naomi Long said her party would continue to oppose the proposals.
"Alliance is committed to a higher education system which, at the point of access, is based on academic ability, not ability to pay," she said.
"We believe that top-up fees will create a two-tier education system with the best courses and top universities able to charge a premium."
In January, all the Northern Ireland MPs who take their seats in the House of Commons Chamber voted against the government's proposals on university top up fees.