Introduced in 2010, Australia's move to a demand-driven higher education system has seen a sharp rise in university enrollments. But a new report from the federal government's Productivity Commission has highlighted that uncapping the total number of placements has also led to an increase in failure rates and a higher number of dropouts.
Brought in to encourage a broader range of students to attend university, the findings indicate the system has had "mixed success."
Although a greater number of "first in family" students from lower socioeconomic backgrounds have enrolled in university as a result of the new system, there has been little change when it comes to students from rural and remote areas.
"The chance of a university education has been transformative for many, setting them on a path to better economic prospects. But it is also costly -- to students as well as taxpayers," Productivity Commission Chair Michael Brennan said.
Calling on the university sector to be motivated by "informed choice" rather than just enrolling large numbers of students, Brennan added that a stronger focus on student outcomes, quality teaching and support is required.
"Government policy and university business models need to adapt to the ongoing shift to a mass participation model," he said.
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