The BN government is taking a political risk if it continues to slash the budget allocation for higher education, said Mahasiswa Amanah.

The student group affiliated with Parti Amanah Negara said cuts such as the RM2.4 billion reduction for the higher education ministry in Budget 2016 would impact the four million-plus first-time voters - many of whom are tertiary students.

"We urge the government not to fool around with the people.

"Cut the rising allocations for the Prime Minister's Department, which grows by the year, and prioritise cutting graft and abuse of power so we can save billions of ringgit," Mahasiswa Amanah chief Ahmad Fadhli Umar Aminolhuda said in a statement.

Otherwise, he said, Mahasiswa Amanah and other student groups will organise a nationwide referendum to encourage students to reject the 2017 federal budget.

He said this year's cuts had tremendous impact on public universities, most notably the 27.3 percent drop in funding for Universiti Malaya.

The Malaysian Academics Associations Congress (MAAC) also reported how the cuts caused a "cascading effect" when it forced universities to reduce research staff and postpone plans to replace outdated equipment, thus retarding university development, he said.

"Don't cut allocation for education. Education is the backbone of a developed Malaysia," he said.

Prime Minister Najib Abdul Razak is due to table Budget 2017 in the Dewan Rakyat this Friday.

Last year's severe cuts sparked backlash, but Higher Education Minister Idris Jusoh said universities will have to make do with leaner budgets.

The government in its budget revision also drastically cut allocation for Public Service Department scholarships and bursaries, leaving many students stranded despite gaining admission to Ivy League universities.

Only the top 20 SPM scorers will be sponsored to study anywhere in the world, while 200 other students will receive scholarships to pursue engineering courses in South Korea, France, Germany and Japan.

The Public Service Department will also offer 8,000 undergraduate scholarships and 744 bursaries. Unlike before, the funding is only for studies in Malaysia.

The government said doing so helps the government save RM240 million a year.

Some opted to crowd source funds for their studies while others were forced to defer admission.