This report sets out the mounting financial pressures facing Australia’s universities and the implications for national education, research and productivity. Drawing on the latest sector-wide data, it shows how nearly a decade of policy change, declining real per-student funding, tighter international student settings and rising research costs have eroded operating surpluses and constrained investment in infrastructure and innovation.

The report highlights the growing misalignment between funding and student demand, the limits on cross-subsidising research and the increasing difficulty universities face in planning beyond the short term.

Key findings

• Over 40% of universities have spent most of the past five years in deficit.
• Average funding per domestic student has fallen 6% in real terms since 2017, despite enrolment growth.
• Around 33,000 student places are misaligned with funding, creating inefficiency and instability.
• Australia’s research and development (R&D) investment has fallen to a 20-year low, while universities continue to subsidise research from their own funds.
• International education faces growing policy uncertainty.
• Regional campuses are particularly exposed, putting local workforce pipelines and access at risk.