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A study from the Australian Government Productivity Commission found that the move to a “demand-driven” system yielded mixed results from an access and student success standpoint.
Under the demand-driven system, in place from 2010 to 2017, the Australian government removed caps on its support for domestic undergraduate students. Any student could attend university, "limited only by the students’ willingness to invest their time and incur (concessional) debt, and universities’ admission requirements," according to the report. A funding cap maintaining the 2017 level of funding was reintroduced in 2018 and 2019 in responses to concerns about increasing costs.
The move to the demand-driven system was intended to expand domestic student participation and increase access for underrepresented groups. The new study found that it was indeed successful in increasing numbers of students participating: the percentage of young people who attended university by age 22 increased from 53 percent in 2010 to 60 percent in 2016.
Compared with other students, the additional students tended to have lower literacy and numeracy skills and a lower Australian Tertiary Admission Rank. While many of these additional students succeeded -- about half of the additional students graduated by age 23, and more are still studying -- more than a fifth (21 percent) of the additional students dropped out without a qualification by age 23, compared to a 12 percent dropout rate for other students.
The study also found that university participation increased for some underrepresented groups but not others. First-generation college students and students from low-income backgrounds were more likely to participate after the move to a demand-driven system, while gaps in participation rates for indigenous students and students from regional or remote areas persisted, and may have widened.
