He said that reasons of inequity led to their abolition.
Mr Costello says that the universities have proposed a system of income contingent deferred loans and top ups.
He made the comments before an Oireachtas Committee along with the heads of the country's universities.
Mr Costello said there are no specific proposals from universities to increase registration fees and said the minister for education has not informed them of any increase.
The Labour TD Ruari Quinn had asked if there was going to by a rise in such charges as some newspaper reports had suggested.
Mr Costello went on to say that the sector was bedevilled somewhat because they do not yet now how much funding they will get in the forthcoming Budget.
He also said that real term funding for individual students has reduced by 17% between the years of 2001 and 2006.
This was disputed by FG's Brian Hayes.
Mr Costello also said a significant number of the seven universities are in deficit.
