First private uni in 24 years led by Clinton

The establishment of the new Torrens University Australia, to open in 2013, comes with a $30 million commitment from Laureate, and is a vote of confidence in the long-term future of Australia's international student market. Half its student are expected to be from overseas.

It is also a bet that enough domestic students will be prepared to fork out $65,000-$85,000 for their degrees, about three times what government-subsidised students pay in public universities.

Laureate is betting that students will be attracted by opportunities to study overseas at other Laureate network universities, with airfare costs to be included in its fees. Students will also be able to complete their degrees in a more intense two-year schedule rather than the standard three years.

Torrens will initially offer degrees in design, hospitality management, global business and a masters in education. It aims to have 200 students when it opens and is targeting to grow to about 3000 students after 10 years.

Initially, it will be located in Adelaide's Torrens Building while the group searches for a permanent location.

Torrens will be the third private university in Australia, joining Bond University in Queensland and Notre Dame in Western Australia, both established in 1989.

There are concerns at the timing of the Rann government's approval for Torrens, coming just months before a new Canberra agency, the Tertiary Education Quality and Standards Agency, starts regulating the sector from next January.

Peak body Universities Australia said it was "surprised" the state hadn't waited for TEQSA to begin operating.

Unlike the Rann government's strategy to use subsidies to attract foreign universities to open offshoots in Adelaide, no such support has been given to Torrens, which will be a foreign-owned private Australian university.

State Treasurer and Education Minister Jack Snelling said he had put financial caveats on Laureate's approval. Laureate must inject $10m into the project initially, to be matched by a further $10m when it enrols its first student and another $10m when enrolments reach 500.

Laureate said it did not expect to break even for at least four years. The company said the university's name remained provisional and it planned to canvass possible alternatives with South Australians and its students around the world.

Privately-owned Laureate has 58 campus-based and online universities across 25 countries. It boasts former US president Bill Clinton as its honorary chancellor.

Speaking from Hong Kong, founder and chief executive Doug Becker was upbeat on the outlook for the Australian sector despite the international student downturn. "To me that is very much a temporary phenomenon," Mr Becker said. "The past decade has been an explosion of growth for Australian higher education and I believe that the next decade will be as well."

Andrew Norton, higher education analyst at the Grattan Institute, said Laureate was welcome competition for a public-dominated sector. He noted that Bond also offered two-year degrees and was growing its market with similarly high fees.

Key to that has been the commonwealth's FEE-HELP system introduced in 2005 that offers private students HECS-like loans, though they must pay a 25 per cent fee.