Author: Andrew Norton

Student income support and the labour market

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For the first time in years higher education student income support recipient numbers have increased. On a late June count, in 2025 147,490 students were receiving payments, up 10,575 or 7.8% on the same time in 2024. All three benefit programs – Youth Allowance, Austudy and Abstudy – increased numbers but 70% of growth came from the dependent Youth Allowance category, so people aged 21 years or less subject to a parental income test.*

Trends in total numbers

Although the 2025 upward trend is noteworthy given the recent history of decline, 147,490 recipients is still lower than any year in the 2009-2022 period. It’s nearly 73,000 below the 2014 peak, despite an increase in enrolments since then.

Policy decisions influence student income support numbers, but cannot fully explain these trends. The most significant negative policy change since 2014 was the 2016 conversion of the Start-up Scholarship to a loan, effectively reducing the non-repayable grant value of student income support by $2000 a year. But a downward trend started before then. Subsequent policy changes were small positives for students without, until 2025, stopping the decline in recipient numbers.

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Demand driven funding for Indigenous medical students – is it a good idea?

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In line with a 2025-26 Budget commitment, the government has introduced legislation for demand driven funding of Indigenous medical students from 2026.

While well-intentioned, this policy is unlikely to make any significant difference to Indigenous medical student numbers and could accidentally reduce the number of non-Indigenous medical students.

Is there a problem that demand driven funding can solve?

In his second reading speech, the minister noted the current low number of Indigenous doctors and the benefits for Indigenous patients of Indigenous health care workers.

As with the earlier demand driven system for Indigenous bachelor degree students, however, it’s not clear that a shortfall in Indigenous doctor numbers is a problem that demand driven funding will solve.

Universities already try hard to recruit Indigenous medical students, with special entry schemes and quotas in some cases. On the available data (below) they are having some success, a source of pride for the medical deans association. 3% of domestic medical students are Indigenous, compared to 2.3% of the overall domestic student population.

The main obstacle to further enrolment increases is unlikely to be funding rather than the difficulties in finding potential students who meet the entry requirements and are not being set up to fail.

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The last university over-enrolment crackdown – some possible lessons

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As announced last year, the government plans to crack down on so-called ‘over-enrolments’ – enrolling additional students on a student-contribution only basis once all a university’s Commonwealth Grant Scheme allocation has been used.

When a proposed new funding system is in place, from 2027, student contribution-only places will only be possible in a buffer zone above a university’s Australian Tertiary Education Commission allocation. 2% and 5% buffers have both been suggested. Currently over-enrolled universities will receive some additional funding to bring over-enrolments within their official allocation of places. However, this will not in all cases reduce over-enrolments to the permitted range. Significantly over-enrolled universities need to moderate student intakes in 2026 to bring their medium-term enrolments down.

Not many current Department of Education staff were there the last time a minister thought reducing over-enrolments might be a good idea. The story is worth telling.

Brendan Nelson and over-enrolment

From November 2001 to January 2006 the education minister was Brendan Nelson, a Liberal. Nelson was worried about the quality implications of significant over-enrolments. The first reference I can find to Nelson’s concern is in a media release from December 2001, a month into his term.

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2024 graduate employment outcomes and early 2025 trends

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The 2024 Graduate Outcomes Survey finally came out this week. As recently as 2021 the GOS came out in the year it covered, not September the following year. The government’s inability/refusal to release data in a timely way means that we need alternative sources of information for sector-relevant trends. This post reports on the GOS and brings in job advertisement and ABS data.

2024 graduate employment results

What I found in alternative sources for 2024 graduate outcomes made me concerned. The ABS labour force survey showed a downward trend in employment for young graduates. If this was right, was it cyclical or something more structural, such as AI reducing entry-level employment? A couple of recent US studies, one specifically looking at recent graduates, suggested an AI impact.

In May 2025, Callam Pickering looked at online job ads for graduates. He found that ads mentioning graduates declined in 2024 compared to 2023 – although they still exceeded 2019 levels. At least to March, ads for graduates in 2025 were tracking below the same months in 2024.

Fewer job ads targeting graduates cannot be good news, but I am not sure how important these are to the overall graduate labour market. There would be jobs typically taken by recent graduates that are not part of graduate programs or exclusively marketed to graduates. As work-integrated learning becomes more common, are firms increasingly hiring people they already know, recruiting graduates but not using advertising to find them? In analysis based on the 2023 GOS, but only graduates from institutions that had paid extra for WIL questions, 19% of people with new undergraduate qualifications said they had secured employment with a WIL employer and another 10% through a network contact made during their WIL experience.

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The future of voluntary HELP repayments

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In recent years voluntary HELP repayments increased significantly, peaking at $2.9 billion in 2022-23, before dropping back to $992 million in 2024-25 (according to data released last week). This post looks at why voluntary repayments spiked and what we can expect for future years.

The spike in repayments – indexation

The 2022-23 and 2023-24 big repayment spikes in the chart above are primarily due to people repaying early to avoid high CPI indexation.

With CPI now back to normal levels this should be much less of a factor in the foreseeable future. That said, to reduce indexation costs HELP debtors considering a voluntary repayment should still make it prior to the 1 June indexation date.

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Why is demand for mature-age undergraduate education shrinking?

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I have an article in The Conversation this morning on why demand for undergraduate higher education has been weak in recent years. I looked at school leavers in this July 2025 post. This post expands on the issue of mature age demand.

Applications

Demand from school leavers is soft but in 2024 was down only 3% on its 2017 peak. But demand from 20-24 year olds is down over the same period by 22% and for the 25 years + age group it is down by 27%. In absolute numbers, demand from school leavers fell by 6,057 applications compared to 44,545 fewer applications from mature age applicants.

Commencing enrolments

For commencing bachelor degree enrolments 2017 to 2023, unsurprisingly given the applications data, demand has also fallen by the most in the older demographics.

School leaver commencing enrolments are down 4% while the figures are 18% for the 20-24 years group and 27% for the 25+ group. Overall 6,216 fewer school leavers but 26,276 fewer mature age students.

Counter-cyclical enrolment patterns

An applications/enrolment spike in the COVID lockdown years provided evidence for one side of the counter-cyclical theory of enrolments – that more people study when jobs are hard to find. Weak labour markets reduce the ‘opportunity cost’ of education, such as forgone work and wages.

Conversely strong labour markets increase the opportunity cost of study. On average this is especially so for older people, due to their wage premium from previous labour market experience. With a strong labour market since 2022 economic theory predicts that, all other things being equal, enrolments will decline.

In the chart below we can see full-time employment for 20-29 year olds who have completed Year 12 but have no degree was at its lowest level in 2020, in the 2015-2025 period for which we have education levels in the labour force survey. In the initial post-COVID lockdown period, however, we can see that it was much easier than it had been in the 2010s to get a full-time job with a Year 12 qualification only.

The 2020s has provided evidence in favour of the counter-cyclical theory of higher education enrolments.

But does a cyclical theory of enrolments fully explain declining mature-age commencements?

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University under-enrolment in the COVID and after years

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Recently the Department of Education published 2021-2022 data on payments under the Higher Education Continuity Guarantee, a 2021-23 Coalition program to compensate universities for under-enrolments. It has previously released data on a predecessor program, the 2020 Higher Education Relief Program.

It shows that over the 2020 to 2022 period under-enrolments cost the Commonwealth nearly $550 million. On my estimates the sector under-enrolled by approximately 47,000 places. Eight universities were under-enrolled in each of 2020, 2021 and 2022. Only four universities received nothing under the HECG or HERP, showing that enrolment shortfalls were widespread across the sector.

What is under-enrolment?

Under the Higher Education Support Act 2003 universities get paid their maximum basic grant amount (MBGA) – see my funding agreement posts for more detail on this – or the value of their Commonwealth supported places delivered (on a relevant Commonwealth contribution * EFTSL basis), whichever is lower.

During the COVID period the Coalition decided that it would let universities keep their MBGA even if they had not enrolled enough students to justify it. This was called the Higher Education Relief Program in 2020 and the Higher Education Continuity Guarantee 2021-2023. The purpose was to provide stability for universities during COVID and post-COVID enrolment turbulence.

There is a 2024-2025 program called the HECG, but it is a redirect of money to equity programs and has nothing to do with the original purpose of the HECG.

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Has funding for Commonwealth supported students been cut?

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With universities back job shedding, academics and their unions are looking for someone to blame. University leaders and consultants are being attacked for poor decisions. The government also gets criticised. UTS history professor Anna Clark says that over the last twenty years ‘we have seen gradual, steady decline in government investment across the sector’. In his recent lament Broken Universities, Graeme Turner says that there has been a ‘steady decline in the levels of funding per student’.

Five years ago, early in the COVID crisis, I wrote a post about government ‘cuts’. This post is an update.

Funding for Commonwealth supported students

As my earlier post noted, time series data is not straightforward. The chart below focuses on the major student funding programs, in today’s terms the Commonwealth Grant Scheme (CGS), HECS-HELP, and upfront student contributions. These funding sources have always had a link to the number of full-time equivalent Commonwealth supported students, although historically the money they delivered supported research as well as teaching expenditure.

Around these core funding sources other schemes serve the same purpose (e.g. transition funding) or similar purposes (e.g. NPILF). The chart below includes the Job-ready Graduates (JRG) transition funding and but excludes NPILF. It includes money paid from the Higher Education Continuity Guarantee, a COVID measure still in place for universities that ‘under-enrol’ that would normally face a CGS penalty. From 2021-2024 the time series excludes the enabling course loading that was previously in the CGS but moved to IRLSAF. But this funding is back in the CGS in 2025 due to the FEE-FREE Uni Ready places. The regional loading remains out from 2021 as it is still in IRLSAF and will join needs-based funding next year.

Overall my time series goes for simplicity over a full count of expenditure on student-related programs. In the time series, one big structural change should be noted, which is research student funding moving to a separate program from 2001, which caused a significant but artificial year-on-year decline.

Trends in total funding

Focusing on recent times, in nominal dollar terms total CGS funding dipped between 2021 and 2022, which was mostly short-term COVID places coming out of the system. HECS-HELP lending fell between 2020 and 2021, driven by the strange decision to pass on reduced JRG student contribution rates to all current students but to grandfather increased student contribution rates, so that only 2021 and later commencing students pay them. HECS-HELP lending fell again in 2022, with lower student numbers also affecting revenue from a university perspective.

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Gender-based violence legislation, Part 3: Reporting and penalties for higher education providers

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The first post in this series outlined the meaning of gender-based violence and processes that apply to all higher education staff and students. The second post looked at processes when a complaint of gender-based violence is made.

Legislative references, unless otherwise specified, are to the Universities Accord (National Higher Education Code to Prevent and Respond to Gender‑based Violence) Bill 2025. The draft code is here; it uses the language of ‘standards’ but I will refer to code ‘sections’ when noting a specific rule or requirement.

Update 20/10/2025: The enacted legislation is here. The enacted code is here.

Reporting

The code comes with very extensive reporting requirements. All the different things providers must report on run for four pages in the code: standard 6, pp. 17-20.

The code stresses the role of the data collected on programs to reduce gender-based violence: code section 6.1.

The Secretary can disclose information received as part of this reporting: sections 43 and 44.

The Secretary must produce an annual report to be included in the Department’s annual report (which is usually tabled in Parliament in October): section 47.

Given the Department of Education’s chronic failure to release higher education data in a timely way a statutory requirement to publish an annual report is good.

While the Department’s annual report operates on a financial year basis it would be helpful to produce the data on a calendar year basis as well, to reflect the operating cycle of universities.

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Gender-based violence legislation: Part 2, Processes for victims and perpetrators

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My first post on the higher education gender-based violence bill and its draft code looked at how gender-based violence is defined and the broad obligations placed on higher education providers and their staff and students.

This post examines procedures for student victims of gender-based violence and for the accused perpetrators. The rules also apply to staff, but as there are existing laws on these matters for workplaces I will focus on students. There is a 2024 summary of university policies and practices on responding to sexual violence, but I have not attempted to compare them to the code.

The code includes reasonable measures to support student victims and, to a lesser extent, accused respondents. I am not convinced, however, that the latter will face a fair process in more serious cases if universities rely on the code alone to guide their policies.

Update 20/10/2025: The enacted legislation is here. The enacted code is here.

Student victims/disclosers

A common criticism of universities has been inadequate responses to student complaints regarding sexual misconduct. In a 2021 student survey on sexual harassment and assault most victims did not report their experience to the university, but of those who did over 40% were dissatisfied. The code includes an extensive list of things that providers must do in these cases: code section 4 (all legal references unless otherwise stated are to the draft code).

These required provider actions include implementing measures to ensure the safety of the discloser, prioritising urgent access to support services, minimising how often the discloser must repeat their story, providing translation and interpretation services where necessary, implementing academic adjustments, and where necessary discussing the investigation and disciplinary processes: code section 4.6.

The discloser must have the opportunity for a support person to be present: code section 5.11.

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