University education can be transformative. It is also costly in terms of forgone earnings, student debt and Commonwealth outlays, so it is important that students, taxpayers and the broader community benefit from the investment.
The ‘demand driven system’ in place between 2010 and 2017 was intended to increase domestic student numbers and give under-represented groups greater access. The results were mixed.
It was certainly effective in increasing numbers: the share of young people that attended university by age 22 years increased from 53 per cent in 2010 to an estimated 60 per cent in 2016, based on data from the Longitudinal Surveys of Australian Youth.
Multivariate regression analysis shows that the ‘additional students’ — those whose attendance can be ascribed to the expansion of the system — were drawn from many backgrounds. However, compared with other students, they typically had lower literacy and numeracy and a lower Australian Tertiary Admission Rank (most had an ATAR less than 70).
Many of the additional students succeeded. About half of the additional students graduated by age 23 years (with many still studying). About half of those graduates entered managerial or professional occupations, outcomes that are similar to those of other graduates.
However, people that enter university with lower literacy and numeracy and a lower ATAR drop out at higher rates. By age 23 years, 21 per cent of the additional students had left university without receiving a qualification compared with 12 per cent of other students.