University dropout rates rising as high living costs force some students to make a tough choice

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More than a third of students at most Victorian universities are failing to complete their courses within six years, new data shows, as the dropout rate nationally is climbing.

Federal Education Department data also reveals domestic students are far less likely to complete their studies than international students.

University students will face an increase in HECS debt from June 1.Credit: Steven Siewert

Nationally, the proportion of domestic university students who completed their course within six years fell to 62.6 per cent in 2021, down from 67.2 per cent a decade earlier. International students fared better, with 79 per cent completing their studies.

The National Union of Students said rising living costs were partly to blame for falling course completion rates, as students struggled to successfully balance study with the need to work longer hours to get by.

At five of Victoria’s eight universities, at least a third of students who had started a course in 2016 had not completed their studies by the end of 2021.

Swinburne University had the lowest completion rate in Victoria at just 42.6 per cent, followed by Victoria University with 54.7 per cent and Federation University with 56.6 per cent.

University of Melbourne had the state’s healthiest completion rate at 89 per cent, followed by Monash (81.9 per cent) and RMIT (74.0 per cent).

Swinburne’s completion rates have plummeted from more than 65 per cent 10 years ago.

A spokesperson said Swinburne was a leader in providing flexible education options, including part-time and online study. The six-year completion rates published by the Education Department did not reflect the lived experience of students, the spokesperson said.

“We are proud to offer a flexible learning environment and have supported large numbers of students during COVID-19, which had a disproportionate impact on part-time students who make up a significant portion of Swinburne’s cohort,” the spokesperson said.

Hayden Cooper, 22, enrolled in a bachelor of engineering practice at Swinburne in 2019.

The four-year course was meant to be vocationally focused, but a little over 12 months later, as COVID-19 restrictions forced the university to shift to remote learning, Cooper withdrew.

“It was going to be online learning and I said it was not for me,” he said.

Cooper still owes $9000 in HECS, even though Swinburne cancelled the bachelor of engineering practice course at the end of 2019, instead offering Cooper and his peers a place in an alternative engineering course.

He now works as an apprentice carpenter and says he has no plans to resume higher education.

The Productivity Commission has identified flagging university completion rates as an issue of national economic concern, as students who exit study early incur debts but fail to gain a qualification.

Debts for incomplete courses are a burden both for students and taxpayers as the government subsidises tertiary education, the commission said in its March report, From learning to growth.

“Completion of valuable training, not enrolment, is the goal of education,” the commission said. “While non-completers can acquire skills and will often still get jobs, competitors tend to get better outcomes.”

“We don’t jump up and down when people change jobs, when they change boyfriends or girlfriends, and we should not expect everyone to get it right first time, every time.”

The commission said that better student supports and guidance by universities “would lower non-completion rates and avert the associated waste, loss of talent and debt”.

It also said universities could do more to help students make informed decisions about dropping their studies.

“Students who exit their university studies early are obliged to incur debt if they miss an obscurely worded deadline. Making it clear what the deadline means would help students make informed decisions,” it argued.

National Union of Students president Bailey Riley said the union had heard from students who were struggling to balance their studies with the need to increase their hours of work to meet rising living costs.

“We have heard from a lot of students that they have been affected, they have been forced to drop subjects because it’s too hard to match a full-time degree with full-time work,” Riley said.

She said university students faced greater cost-of-living pressures than previous generations, leading some to withdraw from study entirely.

Inflation data released on Wednesday also revealed that HECS debts were due to rise by 7.1 per cent, the biggest increase in decades. While no interest is charged on student loans, the gross amount is adjusted in line with inflation on June 1 each year.

Universities have also urged the Albanese government to ditch the so-called 50 per cent pass rule, a measure introduced by the Coalition to weed out students who fail most of their units, by stripping them of their Commonwealth-supported place.

The 50 per cent pass rate, which took effect in January 2022, means students who do not pass at least half of their subjects have their HECS funding cut, and must either pay up-front fees, transfer to a new course, or cease study.

The rule is “punitive” and unduly affects students from disadvantaged backgrounds, universities argue.

Professor Andrew Norton, a higher education expert with the Australian National University, said students exiting university early was not always a problem, particularly if they dropped out within one year.

“If the attrition happens quickly we shouldn’t be too concerned about natural experimentation,” Norton said.

“We don’t jump up and down when people change jobs, when they change boyfriends or girlfriends, and we should not expect everyone to get it right first time, every time.”

Norton said problems arose when students remained enrolled for long enough to incur a debt, but ultimately failed to complete their studies.

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