Universities which charge the maximum tuition fee may look "silly" when students opt for cheaper alternatives, says the higher education minister.
Oxford and Cambridge universities as well as London's Imperial College are expected to charge the maximum annual fee of £9,000.
They fear setting lower fees may saddle them with a reputation for offering "cut-price" education.
But David Willetts MP said most courses should not charge above £6,000-£7,000.
Speaking on Sky News' Murnaghan programme, he said: "I certainly hope to see a range of fees being set by universities.
"To replace the teaching grant they are losing with the extra money coming through the student, universities don't need to go anywhere near £9,000. For many courses it is closer to £6,000 or £7,000.
"It would be a great pity if we had this idea that you have to charge a very high price in order to establish prestige."
'Proper teaching experience'
Universities should charge maximum fees only in "exceptional circumstances", and the Office for Fair Access will require any that do so to show that they are making places available for students from disadvantaged backgrounds, he said.
Student charters, which are to be launched this week, will provide young people with transparency about the education on offer so that they are able to make informed choices about whether proposed fees are value for money.
"Universities are going to have to tell those customers what they are offering," he said.
"I think there have been universities that haven't provided the kind of proper teaching experience that students expect and if they try to charge anything approaching £9,000 for that, I think they will find that there are alternatives available for many young people."
Further education colleges look set to favour offering degree courses at competitive prices.
Mr Willetts said other alternatives, such as two-year degrees and courses closely linked to potential employers, would emerge.
"Universities should remember there are other new players which want to come in and provide higher education - further education colleges for example - and there are employers who want to sponsor courses.
"If students find there are alternative providers that can offer a high-quality higher education experience for significantly less than £9,000, universities that have rushed to £9,000 will end up looking rather silly."