Australia may have overestimated its growth in university participation under the now-abandoned demand-driven system, an analysis suggests, in a finding that underlines the country¡¯s pivot towards foreign students.

Australian National University policy expert Andrew Norton has found that while the number of new Australian students started falling in 2018, the decline among first-time students began three years earlier.

His analysis helps to explain a puzzling stall in the number of people completing university courses despite a surge in initial enrolments. Professor Norton said the boom in commencements early last decade, with the number of new domestic undergraduate students snowballing by 33?per cent between 2009 and 2014, had not elicited a corresponding wave of completions.

The increase in the number of students qualifying three or four years later, when most of the new entrants should have finished their courses, ranged between just 14?per cent and 17?per cent.

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Annual growth in completions slumped from 5.7?per cent in 2013 to 0.3?per cent in 2017, before recovering slightly to 2.2?per cent in 2018. Professor Norton said that if the increase in completions had followed the expected pattern, almost 26,000 more students would have obtained bachelor¡¯s degrees by 2018.

He said the shortfall was partly explained by an increase in the number of dropouts. Another explanation was that more students were studying part-time or deferring, and consequently taking longer to complete. But these two factors combined explain only about half the shortfall in completions, Professor Norton said.

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He believes that the documented surge in commencing students was artificially inflated by people who switched courses or institutions midstream. ¡°Course-changing students are counted twice as commencements but only once as completions,¡± he said.

His analysis used a dataset called the Commonwealth Higher Education Student Support Number to tease apart ¡°repeat customers¡± from people embracing degree-level study for the first time.

It found that rather than merely flatlining, the number of domestic newcomers starting bachelor¡¯s degrees had fallen by about 7,000 between 2014 and 2016, and is likely to have dropped further since.

The finding comes amid concern that international students may be approaching a ¡°tipping point¡± in Australia. Speaking on the sidelines of the World Economic Forum meeting in Davos, University of Sydney vice-chancellor Michael Spence questioned how comfortable Australians would be if domestic students were outnumbered by foreigners at any of the country¡¯s public institutions.

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Dr Spence said it was not clear at what point the rising share of international students would cease to be considered compatible with universities¡¯ ¡°social licence to operate¡±, but ¡°that is a question that my governing body is constantly debating¡±.

Professor Norton¡¯s analysis shows that international graduates are gaining on their domestic peers. At the bachelor¡¯s level, foreigners¡¯ share of completions rose by 2?percentage points between 2015 and 2018.

But this increase is overshadowed by a 51?per cent explosion in the number of foreigners completing taught postgraduate courses, compared with 5?per cent growth among their domestic peers. The trajectory suggests that more international students than Australian students successfully completed taught postgraduate courses in 2019.

These courses have attracted more foreign than local commencements since 2014, with international entrants surging by more than two-thirds since then.

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john.ross@timeshighereducation.com