The 2026 funding agreements, Part 2: Sorting out the medical student policy mess

Last year the Parliament passed legislation making Commonwealth supported places demand driven for Indigenous students enrolled in medical courses. It sounded good, we need more Indigenous doctors. But as I pointed out, the policy as legislated risked reducing non-Indigenous medical student enrolments without increasing Indigenous medical students enrolments.

The 2026 funding agreements reveal that the Department of Education has been quite inventive in finding a workaround to prevent this perverse outcome. The price, however, is yet more complexity in higher education policy.

The problem

A demand driven funding policy for Indigenous medical students assumes that fixed total funding holds Indigenous enrolments down. Student places are indeed unusually restricted in medicine. Medicine is the only ‘designated’ course, meaning that the government sets a specific number of student places. While designation does not prohibit over-enrolments (i.e. student contribution only places), medicine also has a completions cap. A standard funding agreement clause specifies that a university must not change its medical enrolments in ways that will change annual completions from the capped level.

While medical student numbers are restricted it is not clear that this prevents increased Indigenous enrolments. As I argued in my original post, universities already try hard to recruit Indigenous medical students, with special entry schemes and quotas in some cases. On the available data (below) these schemes are delivering Indigenous enrolments, 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. It is finding potential students who are not being set up to fail.

Read More »

Higher education participation rates at age 19 – a migration data update

For many years I have published estimates of the domestic higher education participation rate at age 19. That age was chosen as it is the modal age of domestic higher education students.

To calculate a participation rate we need a count of domestic higher education students (Australian or NZ citizen, permanent resident) and a count of the ‘domestic’ population, that is all Australian or NZ citizens and permanent residents. There are significant issues with calculating both numbers – explained in this post from last year.

One of these issues is that the ABS population figures are inflated by temporary migrants. They need to be removed from the count to get a ‘domestic’ population figure. The ABS does not provide a temporary visa/domestic breakdown. As a workaround, my participation time series deducts international 19 year old higher education students from the ABS 19 year old population estimate.

A new methodology

This onshore higher education international students aged 19 correction, however, has several problems: a) the higher education enrolment data does not cover all higher education providers; b) vocational education students are not included; and c) other temporary visa holders in Australia are not included.

These omissions should lead to an under-estimate of the temporary visa population and, after their deduction, an over-estimate of the ‘domestic’ population.

To get a more accurate temporary population figure, I asked the Department of Home Affairs for data on 19 year old temporary visa holders in Australia on 30/06/2024, the date of the ABS population estimate. Some of these visa holders may not satisfy the population count rule – that the person is or will be in Australia for at least 12 months in a 16 month period. However, people with temporary visas who satisfy the 12/16 rule but who were temporarily absent from Australia on 30/06/2024 are omitted from the count.

Read More »

The last university over-enrolment crackdown – some possible lessons

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.

Read More »

Why is demand for mature-age undergraduate education shrinking?

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?

Read More »

Despite an increase in applications for the 2024 academic year, school leaver interest in higher education remained below mid-2010s levels

University applications statistics for 2022 to 2024 were finally released late last week, giving us another data source on demand for higher education.

This post focuses on recent school leavers. The chart below shows that applications for this group were up in 2024 on 2023, but that the slump in applications since the late 2010s remained evident – other than the spike for academic year 2021, which is only apparent for teenagers who finished school prior to 2020. This is consistent with people deciding to sit out the COVID recession at university.

That COVID spike meant that in 2021 an unusually large share – 35% – of the 19 and under applicant group were not people who had finished school the year before. This share was 32.5% in each of 2023 and 2024, higher than any year 2012 to 2020, when it averaged 28.4%. This could mean that we are seeing more young people delaying higher education. This data source does not, however, distinguish between people who delayed applying until one or two years after finishing school, and people who enrolled but reapplied to change university and/or course.

Read More »

What explains delays in attrition?

I was quoted at the weekend in a Herald-Sun article about attrition from Victorian universities. The journalist wanted to know how much HELP debt students typically have on drop-out, but unfortunately this data is not regularly published (it should be of course).

But based on some old Grattan analysis, which had actual data to the mid-2010s, the fact that first year is the most common year for attrition, and the strong link between part-time study and attrition, I thought that the typical $$$ figure may not be too high.

That said, average or median HELP debt on dropping out may have increased at a faster rate than indexation in the early 2020s. This is due to students spending more time enrolled before dropping out.

Read More »

Mapping Australian higher education 2023 – data update March 2025

Update 20/12/2025: More recent data here.

—————————————————————————————————

I won’t have the capacity to produce another edition of my Mapping Australian higher education report in the foreseeable future, but I am extending the life of the October 2023 edition by updating the data behind the charts.

Mapping‘s chart data is the only publicly-available source of long-term time series data on many higher education topics, especially on financial matters.

I had been waiting on the 2023 university finances report before releasing another chart data update. That finally happened yesterday. Despite a record 27 universities reporting deficits, in the aggregate there was a small surplus, after a loss overall in 2022.

2023 had some weak numbers for the two main Commonwealth student programs, the Commonwealth Grant Scheme and HELP. Several factors were behind this: temporary COVID places coming out of the system, Job-ready Graduates reductions in total funding rates for some courses, and weak domestic demand. These programs trended up in 2024 and 2025, as seen in the chart below, although high CPI-driven indexation was a significant factor.

The updated chart data is available here.

Where are the young people who are not at university?

Earlier this month I wrote a post showing that higher education enrolments at age 19 years, and the domestic participation rate at age 19, were down in 2023 compared to 2022.

This post explores possible reasons for this downward trend.

The teenage job market

One explanation of declining enrolments at age 19 is higher education’s counter-cyclical relationship with the labour market. At the margins, some people prefer work to study, but study when work is not available. The higher education participation and full-time employment rates in the chart below match this theory. Higher education participation increased after COVID-related full-time job losses in 2020 and then decreased as job opportunities returned.

Education and Work TableBuilder supports analysis of smaller sub-groups than the standard ABS data releases, but with an increased risk of rogue results. Broader 15-19 year old statistics, however, confirm 2023 as a very strong year for full-time teenage employment. Both sources show that teenage full-time jobs grew strongly post-COVID and then softened in 2024, while remaining good compared to the 2010s.

Read More »

The higher education participation rate at age 19 almost certainly fell in 2023 – but an exact rate cannot be calculated

Despite significant policy interest in higher education attainment rates, the preceding participation rates are rarely reported. The most readily available time series is in Mapping Australian higher education, at figure 5 of the 2023 edition. It reports the participation rate at age 19 years, the modal university student age. For the first time in decades, the Department of Education recorded a participation rate in their recent 2023 statistics release.

Unfortunately data issues mean participation figures are only estimates. This post discusses these data problems and compares participation rates using two different methodologies. Both point to participation in 2023 being lower than in all recent years.

Read More »

Will the ‘Costello baby boom’ have a weaker demographic effect on higher education than expected?

Since the late 2010s I have promoted the idea that the so-called ‘Costello baby boom’ cohorts will arrive at university age from the mid-2020s, increasing school leaver demand for higher education. As the chart below shows, annual births go from around 250,000 in the early 2000s to around 300,000 later in the decade.

Demographers are sceptical of how much effect mid-2000s pro-family policies had, but former Treasurer Peter Costello’s line that ‘if you can have children it’s a good thing to do – you should have one for the father, one for the mother and one for the country..’ was sufficiently memorable that this baby boom has his name attached to it.

As these cohorts approach university age this post takes another look at the data.

Read More »