Delivering the convocation address at Avinashilingam Institute for Home Science and Higher Education for Women, Sitharaman said it was noteworthy how the education sector has evolved, especially through philanthropy, in Tamil Nadu.
The Union minister said the University Grants Commission (UGC) should ensure that "no capitation fee" becomes the norm.
She asked UGC Joint Secretary and Chief Vigilance Officer Dr Arcana Thakur, who was present at the convocation, to use her good offices to convey the message for the benefit of the institute, which does not want to take capitation fee.
Higher regulatory institutions should be worried about the quality of education imparted and it can exempt the capitation fee if an institution comes forward, she said.
Importantly, if UGC comes up with rules and set of norms in the broader interest of promoting education, it should also adopt certain flexibilities with regard to some exceptional institutions and universities, she said.
Sitharaman was conferred with the honorary degree of Doctor of Letters at the convocation.