Police and university students clashed on the steps of Parliament in Melbourne as dozens of police officers on foot and horseback attempted to quell the growing unrest.

Students had earlier burned a copy of the federal budget in protest at the Abbott government's reforms to higher education that could result in students paying higher fees and greater interest on loans for their degrees.

After protesters marched to Parliament, about 20 started a sit-in on the Spring Street tram tracks.

They formed a ring around the teenage girl, believed to be a Camberwell High School student, who became the centre-point of the protest.

The teenager, who identified herself as Tallulah, sat on tram lines and other protesters linked arms in a tight ring around her to block police officers from removing her.

Police eventually removed the group, lifting them by the arms and legs one by one. The intersection of Spring and Bourke Streets was cleared about 4.30pm.

Sam Castro was one of the last protesters to be removed from the ring.

The co-founder of WikiLeaks support group, Whistleblowers, Activists and Citizens Alliance (WACA), said Talullah was one of the first people to sit down on the road.

"She made it quite clear she didn’t want to get up," Ms Castro, who had three children about the girl’s age, said.

"When I asked her her age and she said 15 there was no way I was going to leave her sitting there to face police by herself."

Asked why she was there, the girl told Ms Castro "I'm fighting for my future, I want to go to uni and I’m not moving.'"

Ms Castro said Talullah’s mother had known she was going to the rally, but found out by text message that she was sitting on tram tracks.

Ms Castro said she thought the girl was very brave and "gets the seriousness of what’s going on. Our job as older activists was to protect her (from police)."

Talullah was questioned by police but it is believed she was later released and left the scene with her mother.

Jacob Grech, who spoke at the protest on behalf of Trades Hall, said about 18 protesters were arrested, including three minors, but later let go after police took their names and details.

Thousands of students turned up to the National Union of Students protest when it started at the State Library, with Greens MP Adam Bandt and Labor higher education spokeswoman Kate Ellis both re-affirming their vow to vote against the budget.

They cheered as a copy of the budget papers were set alight in a cooking pot and marched down Swanston Street to State Parliament.

Police blocked Bourke Street at Exhibition Street as the students continued their protest at the steps of parliament.

They chanted slogans, including "bullshit, come off it, our education is not for profit" and "block the budget."

Greens Senator Sarah Hanson-Young also appeared beside Mr Bandt holding a sign that read: "A first degree shouldn't cost a second mortgage".

National Union of Students' education officer Sarah Garnham called for Education Minister Christopher Pyne to resign and said this would be the first of several protests against the Coalition's budget with planned demonstrations against changes to Medicare.

Ms Garnham told Fairfax Media, marchers were protesting against the budget, which she said was the "worst budget in Australian history for students".

"It imposes unlimited fee increases, massive attacks on the HECS scheme and a demolition on student welfare and welfare for young people more generally," she said.

Ms Garnham, 26, said students were "outraged...by the fact the government has, since the budget was announced, consistently lied about what it involves for students. They have advised that students are a wealthy minority for the community and that fees may not even be increased. Fees will absolutely be increased, every economist(‘s modelling) has shown that".

She said two-thirds of students lived in poverty: "There are several up front costs associated with studying and we are going to be forced out of universities, studying and degrees that will allow us the jobs we want if these reforms come through".

The protest was also part of a national effort to "block the budget", which she said affected "every section of the community except the wealthiest minority in Australia. We see our protest as part of the effort to block the budget in its entirety".

Ms Garnham, who is enrolled in a university arts degree but is paid minimum wage as a union officer, defended students’ right to protest against Coalition claims it would end the "age of entitlement".

"This comes from ministers who went to university for free. There’s no undue entitlement involved in accessing a decent education. It should be available for everyone. We are rightfully angry and have every right to express that anger to the government," she said.

The demonstration follows a student protest at Melbourne University on Monday, which forced former federal Liberal MP Sophie Mirabella to be escorted out of a room where she was delivering a guest lecture. Mobile phone footage showed people chanting as Ms Mirabella was guided out.

Melbourne University's computer system was also hijacked with photos of Margaret Thatcher loaded on the screens.