A little bit further north is Brunswick, from which it is easy to get on the tram right to the door of Melbourne Uni. This is a bit more of an affordable area (or was when I was there). Also, it's possible to cycle across Royal Park and onto Royal Parade, right to Uni. Take a look at the link:
http://www.multimap.com/maps/?#t=l&map=-37.7913,144.96127|15|4&loc=AU:-37.76637:144.96127:14|brunswick|BRUNSWICK%20VIC