STUDENT debt for university courses has hit $26 billion, with more than $6 billion unlikely to ever be repaid back to the Federal Government, a study by the Grattan Institute revealed on Monday.
The institute's report found a huge rise in university enrolments since the government removed many controls, including caps on student places.
Institute higher education program director Andrew Norton wrote that while the enrolments had grown, many students were not finishing courses and were unlikely to ever repay their debts.
Under the Higher Education Loans Program, students are required to repay government loans for their study once their incomes reach a certain level - different for each industry.
Mr Norton's report found the government was likely to hand out up to $7 billion in 2015-16 under the study subsidies, up from $5.5 billion in 2011-12.
The government lent students some $4.3 billion through HELP in 2012, while the increase in enrolments showed positive growth for the universities sector.
Estimated career earnings of a bachelor-degree graduate increased by about $80,000 in real terms between 2006 and 2011, compared to someone with a Year 12 only education.
"Though students are charged more for their education than in the past, this has been more than covered by increasing income" Mr Norton said.
While long-term graduate income remained high, young graduates were slightly less likely to be in professional or managerial jobs in 2011 than they were in 2006.Report highlights:
Most trends in the higher education system are positive.
Enrolments in health and engineering courses have grown more quickly than other areas.
Student satisfaction with teaching is increasing.
The quality of Australian research is rated more favourably now than in the past.