Universities Australia Deputy Chief Executive Catriona Jackson said the increase in enrolments was in line with population growth and demonstrated the system was financially sustainable.

“The figures show there was an initial surge following the uncapping of university places as the system absorbed ‘unmet demand’. This has now tapered off, easing financial pressure on the system,” Ms Jackson said.

The number of domestic students starting an undergraduate degree grew by 1.5 per cent between 2014 and 2015, compared to the peak growth rate of 9.6 per cent in 2012, according to figures released by the Department of Education and Training.

The new figures show that Australian universities continue to be a top international study destination with the number of overseas students rising by seven per cent since 2014.

Access to university for under-represented groups has continued to improve under the demand-driven system.

Indigenous enrolments continued a trend of strong growth, increasing by 7.1 per cent in 2015.  Indigenous students now make up 1.5 per cent of all domestic enrolments, up from 1.2 per cent in 2006. But this is still well short of the Indigenous share of the population (2.7 per cent).

The number of students from low socio-economic backgrounds grew by 3.2 per cent, while students from regional areas increased by only 1.8 per cent.

“Strong growth in the numbers of Indigenous students, as well as those from low socio-economic backgrounds, is heartening, although not nearly sufficient. Slower than average growth in regional enrolments is of particular concern,” she said.

“A university education that is accessible to a diverse range of students with the capacity to study is more important than ever.”

The figures also reveal that attrition rates are largely unchanged compared with a decade ago.

“Even with the rapid expansion of student numbers, attrition rates have remained steady since 2005. This is a big achievement for Australian universities,” Ms Jackson said.

“The figures serve as a reminder of the importance of programs designed to not only improve access but to enhance student retention and completion rates in the modern university system.”

The 2016 Federal Budget cut $152 million from the Higher Education Participation and Partnerships Programme (HEPPP) which supports the most educationally disadvantaged students to succeed at university.

“Universities Australia strongly opposes cuts to this landmark equity program.”