This policy brief analysed 40 years of Australian census data to determine the changing value of a university degree. It looked at changes in tertiary education participation and the ‘wage premium’, which is the amount someone could expect to earn with a qualification compared to others in the same age group. 

The brief finds a system imbalance. University is increasingly perceived as the optimal pathway, even as the labour market advantage narrows. Meanwhile, Vocational Education and Training (VET) struggles to maintain its status as a high-value option, and is becoming limited to a narrow group of occupations and trades.

The brief recommends replacing the Job Ready Graduates funding regime. Reform should focus on diversifying post-secondary pathways, rebalancing costs so there are multiple options to solid labour market returns and ensuring the benefits of post-secondary education are shared equally.

Key findings

• The value of a degree has fallen – the full-time wage premium is shrinking as more Australians graduate, meaning a degree no longer delivers the same financial advantage it once did.
• Student debt is growing and sticking for longer – repayment times have blown out from about seven years to more than 10 years on average.
• A Federal Government one-off 20% debt cut only rewinds the clock – the relief is welcome, but it does not solve the structural drivers of rising debt.
• University is the dominant pathway, but the system is out of balance – participation in higher education has been steadily rising, while VET has stagnated or gone backwards.