Our education system is undergoing a major change in the shadow of technological advancements like AI, and in a post-pandemic era.

Australia currently has 42 universities—36 public and six private—collectively serving a student population that is larger, more international and more diverse than ever. In 2024, 1.68 million students were enrolled in Australian higher education, an increase of 4.7% in one year.

Despite this growth, the sector is managing one of the most significant periods of change in decades. To compete on the world state, major institutional mergers are occurring, while COVID-19 has permanently altered the delivery and economics of education. At the same time, the emergence of AI is forcing universities to reconsider how students learn, how professors teach and what a university qualification actually demonstrates about a student’s abilities.

After many false starts and industry whispers, the University of Adelaide and the University of South Australia (UniSA) officially formed the newly combined Adelaide University on January 5th, creating an institution with roughly 70,000 students. While the newly formed university debuted at 79 in the QS World University Rankings, the integration process has faced grumblings from both current students and faculty – whose studies and jobs have been impacted by the combining of thousands of courses, systems, staff roles, campuses and student services into one institution.

Despite this, Adelaide University is expected to become Australia’s largest educator of domestic students, with modelling suggesting its activities could contribute approximately $4.7 billion annually to the Australian economy. The success or failure of the venture is sure to influence whether other governments and university councils see mergers as a viable response to financial pressure and global competition.

It isn’t outlandish to presume that COVID-19 was one of the contributing factors in the need for the merger to happen, as the pandemic was a defining shock for Australian higher education. In an industry that relies heavily on international students, border closures wreaked havoc on student visa numbers, which dropped by more than 60% between September 2019 and September 2021.

In response, universities responded by retaining students online, expanding offshore delivery – with offshore enrolments growing from 22% of international enrolments in 2019 to 40% in 2022.

Since then international education has rebounded strongly, with onshore international higher education enrolments reaching a record 481,851 in 2024, up 17.7% from 2023. International students represented approximately 31% of all students studying onshore. This recovery, however, hasn’t stemmed the underlying vulnerability, with 13 universities still recording a deficit despite rising international study fees.

This ongoing dependence leaves universities highly sensitive to changes in migration policy, visa processing, housing availability and Australia’s reputation as a study destination.

The lasting impact of COVID is an accelerated change in the university model: learning is no longer confined to on-campus. Recorded lectures, online tutorials, digital assessment and hybrid participation have become normal parts of the student experience – something which has been hotly debated by both students and lecturers alike. Square Holes has worked alongside University Senior College, and TAFE in South Australia to look at how these evolutions and changes are impacting students and how they want to learn and engage with their studies.

One of the key topics with students in our project with USC was around the impact and use of generative AI.

A 2024 survey involving more than 3,000 academic and professional staff across 17 Australian universities found that 71% were already using generative AI in their work. Respondents revealed that they were using AI to summarise information, prepare teaching material, generate ideas, support administration and assist with research tasks.

For students, AI can be useful as an editor, translator, or brainstorming partner, making education more accessible and personalised. However, it can also generate essays and reports in minutes, or rewrite work seamlessly – taking out any personalisation and learning on behalf of the student.

The impact of AI on higher learning will be huge – both in how students are examined moving forward, with a push to more creative assessment reforms that demonstrate knowledge rather than writing skill, and in the course content that is offered to students.

The question is now less about  “Do we allow AI?” to “How do we produce graduates who can use AI without becoming dependent on it?”

As our needs and expectations evolve as a nation, so too will our universities, with people moving in and out of education throughout their careers, completing full degrees, postgraduate qualifications, microcredentials and employer-supported training. Universities will compete not only for school leavers, but for working adults seeking to update their capabilities as industries and technologies change.

Australian universities are being asked to become bigger, more accessible, more technologically sophisticated, while staying closely connected to the needs of industry—while operating under intense financial and political pressure.

Square Holes is a cultural insight studio.

We design mixed-method explorations of people and culture beyond the category, uncovering the patterns, tensions and shifts shaping behaviour to inform strategy, inspire innovation and enable confident decisions. Our studio model brings together the right mix of thinkers, researchers and specialists for each exploration.

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