The welcome $13.7million funding boost for the University of Newcastle from this week's Federal Budget will assist the ongoing development of quality teaching and research facilities.

"The University is pleased our commitment to providing students first-class teaching and learning and research facilities has been acknowledged by the Australian Government through the injection of new funding," Vice-Chancellor, Professor Nicholas Saunders said.

"The University is looking at a range of options to expand facilities across the Callaghan, City and Central Coast campuses, and this funding will go some way in moving these projects forward."

The University will also benefit from a range of other measures for the higher education sector outlined on Tuesday night including:

• The establishment of the $11billion Education Investment Fund to support capital development in universities and research institutions
• The new Health Investment Fund for capital works an infrastructure for medical research institutes
• Increased funding for scholarships and fellowships.

"Despite these welcome commitments, the University is disappointed that the Government did not take the opportunity to address concerns about income support for students," Professor Saunders said.

"The need for increased indexation of Commonwealth grants and increased funding per student place also remain concerns that we will continue to call on the Government to address in future Budgets."