There are two reasons to go to university. 

Firstly, university can be great fun. You drink, socialise, date, make lifelong friends and spend several years surrounded by clever people discussing interesting ideas.

You escape your parents without yet having to become a fully functioning adult. It’s a good time of the lifecycle. 

The second reason is money. A university degree makes you more employable and results in a higher pay cheque. 

For decades, the deal was straightforward. You sacrificed four years of full-time earnings, accumulated a manageable student debt and emerged with a qualification that placed you near the front of the labour-market queue. 

Three years ago, I wrote a column asking whether Australia was becoming overeducated. 

I argued that the data still suggests you better get as educated as possible because, on average, the more formal education you have, the more money you earn. 

For now, this remains true. 

ABS data tells us that in August 2025, Australian employees with a postgrad degree earned $2000 per week while a bachelor’s degree earned you $1700.

Those with a certificate III or IV earned $1400, while employees without a post-school qualification earned $1000. 

The university pay premium is alive. The question is whether it will survive in its current form. 

A university degree traditionally does two things.  

First, it develops skills and knowledge. A nurse needs to understand anatomy. An engineer needs to understand mathematics. A lawyer needs to understand the law. 

Second, and perhaps more importantly for many generalist degrees, it sends a signal. 

Employers find it difficult to measure the true capabilities of a 22-year-old applicant. A job interview cannot reliably reveal intelligence, persistence, literacy, judgment, conscientiousness or the ability to work through a tedious task without giving up. 

Education becomes a convenient proxy. 

Completing a degree suggests that you can read, write, meet deadlines, follow instructions and stick with something for several years.

It does not prove that you will be a brilliant employee, but it is usually better than knowing nothing about you. 

The value of that signal, however, depends on three things. It must be scarce, it must be trusted and it must be relevant. 

All three are now under pressure. 

The Department of Education tells us that in 1950 only 30,630 students were enrolled in Australian higher education. University was a genuinely elite experience. A degree immediately distinguished you from almost everyone else in the labour market.

Of course, employers handed out pay premiums for university graduates. 

The new Year 12 certificate

Today, university is a mass-participation system. Of the Australians who completed Year 12 in 2023, 43 per cent went straight into higher education the following year.

The federal Department of Education estimates that........

© The New Daily