THOUSANDS of students are allegedly dropping out of university in Australia because of red tape and changes in the student support scheme, Austudy.
The Australian Vice Chancellors' Committee has criticised the bureaucracy in administering the family means test for students to receive a living allowance.
In a submission to a government review of higher education, AVCC executive director Stuart Hamilton said the rules and regulations are very confusing. It can take several months before a final assessment, by which time many students are unable to support themselves and are forced to leave.
The education department estimates that more stringent means testing will make some 85,000 students who are receiving Austudy become ineligible or have their entitlements reduced.
A further 25,700 students on Austudy grants will be affected by the decision to raise the age of independence from their family from 22 to 25 years.
Complaints from parents and students earlier this year forced the government to back down on other proposed changes to Austudy.
Education minister Amanda Vanstone apologised to families for the delays. She said an extra 8,500 students would be eligible for higher benefits because of a relaxing of new rules.
The means test was introduced by the former Labor government to stop tax avoidance by wealthy families to get student aid.
But the conservative government further tightened the means test and also imposed a two-year waiting period on migrants who applied for Austudy. This was expected adversely to affect at least 1,700 student hopefuls.
In its submission, the AVCC says one of the main causes for the delay in students' learning of their eligibility or not for an allowance was inefficiency in administering the means test. The committee says students and their families require clear and concise instructions and information indicating the levels of entitlements.
Of greater concern to students, however, are the government's changes to the Higher Education Contribution Scheme - the deferred payment system also introduced by Labor that allows students to put off paying tuition fees until after they graduate.
While Labor fixed a HECS charge equal to about 25 per cent of the average cost of a university course, the conservative government sharply increased the charge and introduced a three-tier system so that students undertaking more expensive courses pay more.
An analysis by the National Union of Students revealed significant differences in the cost of degrees over a lifetime of repayments. Graduates on low salaries could end up having to pay 70 per cent more for the same degree as a graduate earning a higher salary.