Some Massey students could face a hefty fee hike next year if the university wins government approval to raise course costs by double the amount usually allowed.

Massey University closed its books on a high note in 2012 but will once again consider making a bid to raise its fee ceiling for some subjects to match the amount charged by other universities.

The university's student fee income fell $7.2 million short of the benchmark last year. That shortfall was partly due to government-enforced capping of student enrolments and relatively low domestic fees, Massey vice chancellor Steve Maharey said.

Both Massey and Victoria universities last year sought permission to increase their fees by up to 8 per cent. A report last year from Massey's council cited a desire to "highlight the inequities associated with the relative fees across the university sub-sector".

The Tertiary Education Commission (Tec) declined to grant its request, but Massey is once again eyeing an increase in fees for its education, humanities and social sciences papers which Mr Maharey said lags behind other universities in cost but not quality.

The university had opted for a "zero fee" increase in 2004 and was now paying for that decision, Mr Maharey said.

"If we could have an 8 per cent increase in some areas we would like it, of course, but we wouldn't apply for it across the board."

Massey University Students' Association president Steve Christodoulou said any bid to raise domestic fees would face strong opposition from students crippled by ballooning loans. "The more we charge students, the more the Government have in debt," he said.

Universities can increase their fees by up to 4 per cent per year under the Government's annual maximum fee movement policy, and can in exceptional circumstances seek an increase of up to 8 per cent. A review of the fee ceiling policy set down by the Tec was well overdue, Mr Maharey said.

"All universities are finding this economy quite tough, because the Government has been freezing and cutting [funding]. We are saying to them that this cannot go on forever."

Massey was also dealt a $2.9m sting when it missed out on a portion of Student Achievement Component (Sac) funding.

This was attributed to Massey's part-time and extra-mural student population, which went unrecognised, Mr Maharey said.

The Sac funding pool is measured on student course completion rates, and attracted controversy when it was opened for tenders from private training establishments last year.

As a result, polytechnics around the country, including UCOL, missed out on millions in funding, leading to job cuts and student roll capping.

Massey ended December 2012 with a healthy cash flow, more than a billion in assets, and a surplus of about $9.6m creeping up to the 3 per cent surplus mark required by the Government.

The university spent almost $23m in capital last year - the bulk of it directed toward improving infrastructure across its three campuses.

In a statement, a spokesman for Tertiary Education minister Steven Joyce said there were "no plans" to review the policy and the minister believed the maximum fee increase of 4 per cent was "appropriate".

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