11 November 2025
A university degree no longer delivers the same financial advantage it once did. Drawing on 40 years of Australian census data, Mitchell Institute researchers make the case for replacing Job-ready Graduates and diversifying post-school pathways to better balance the costs and benefits of tertiary education.
Key points
- Over the past 40 years, university has become a dominant pathway following school, while vocational education and training (VET) enrolments have stagnated or declined.
- At the same time, the full-time wage premium for a university degree – how much more you can expect to earn with a university degree relative to everyone else – has fallen.
- With tertiary qualifications more common, higher levels of study are increasingly needed to achieve the premium once available with lower-level awards.
- Student loans are larger and taking longer to pay back. Of Australians who have a student loan, those aged 30 to 39 years now carry the highest average debt, exceeding $30,000.
- The shifting landscape highlights the difficult problem facing the Australian Government deciding who pays for tertiary education and how much.
- The Albanese Government’s election promise of a 20% reduction of student debt will help to reduce the burden, but it will only return average balances to pre-COVID-19 levels.
- There is a pressing need to replace the Job-ready Graduates funding regime, especially its higher student contributions for humanities and business courses.
- Australia’s tertiary education system lacks coherence, and there is evidence of a “missing middle” emerging, which is high-quality sub-degree qualifications that provide pathways into higher-level jobs.
- Reform should focus on diversifying post-secondary pathways, rebalancing costs so there are multiple options to solid labour market returns and ensuring the benefits of post-secondary education are shared equally.
