Education Minister Joe McHugh has been told he must come up with a solution to the shortfall in third-level funding after he ruled out hiking students' fees for the next five years.
The call comes as universities are looking for an extra €117m in State funding for next year to pay for their basic operations.
The Irish Universities Association (IUA) is also seeking an additional €50m for research, €11m for capital investment and €100m for expanding capacity.
However, the funding targets set out in their pre-budget submission are unlikely to be met by Finance Minister Paschal Donohoe.
In an interview with the 'Sunday Independent', Mr McHugh promised there will be no increase to the €3,000 student registration fee.
He said he did not see any hike to the contribution over the next five years if Fine Gael remained in power.
The freezing of fees is backed by Fianna Fáil, but the Opposition party said the minister needed to come up with alternative funding streams for colleges.
The party's education spokesman Thomas Byrne told the Irish Independent it had a long-term commitment not to increase fees. But he said there was an onus on the Government to put forward workable alternatives.
Mr McHugh said the answer to the funding crisis should come from universities rather than the Government.
"The ultimate solution and the driving force will come from the autonomy of the third-level colleges.
"Big decisions will then have to be made around funding at a national exchequer level but national exchequer funding, the taxpayer, won't be the total solution for universities," he said.
But Mr Byrne said the minister needed "to put forward a comprehensive plan on funding". He suggested pushing the onus back onto universities was "an agenda for fees down the road".
Taxpayer funding for higher education fell dramatically during the economic crisis, from €1.4bn in 2008 to €0.9bn in 2015. There have been modest year-on-year increases since, with €1.1bn allocated for this year.
However, in its pre-budget submission the IUA calls for a dramatic acceleration in funding. It says €117m is the "minimum needed" to fund the increased student intake, address quality-related and access issues, and meet known cost increases for national pay rounds.
But Mr McHugh criticised third-level colleges for hiking student accommodation fees ahead of the release of this week's CAO offers. "I understand that universities make a lot of investment and they have their own costs but I am disappointed that there has been an increase," he said.