Australia’s $30.1 billion higher education sector is now home to 43 universities and 1.4 million local and international students.

But just how relevant and applicable are the qualifications students receive for the real-world?

A new Ernst and Young report has found that the perceived benefits of a university degree do not stack up against the realities.

“University graduates earn more over the course of their careers than non-graduates. However, being a university graduate isn’t quite the elite status it once was,” the report states.

“Standing out is becoming more and more difficult. The number of people holding a degree today makes it increasingly difficult to stand out, leaving more and more people looking for additional qualifications or expertise.”

And the struggle for students to stand out will soon bring with it change, the report outlines, with disruptive education models coming into the frame to prevent more students “leaving the university environment with more debts and few job prospects.”

It challenges universities to move from a “faculty-centred” to a “learning-centric” approach and to “unbundle” degree programs in order to gain a competitive advantage.

Technology to drive change

The diminishing prestige of a degree is largely due to forces being driven by modern technology, according to the report.

Convergence between industries is resulting in competition from “non-traditional rivals,” it explains, with corporates now entering the field.

And this is leading to a desire for integrated curricula from students.

More than half (53%) of the 3,000 students interviewed stated they were very interested in an integrated study/employment program, while a further 30% said they were fairly interested.

Widespread popularity of digital and online learning is also changing the nature of university education.

“Some universities are beginning to provide digital forms of learning or open online courses, but student demand is outpacing supply. Prospective students see online learning as flexible and convenient, thereby increasing access,” says the report.

But again, the perception of these flexible degrees was shown to be inflated.

Forty-two percent of prospective students said they would prefer the majority of their degree to be delivered online, while only 22% of current students preferred mostly online learning.

Continuous learning the norm

Another disruptive force set to hit universities is a growing culture of continuous learning.

“The concept of life-long learning is becoming a career necessity rather than a discretionary luxury,” details the report.

And this could very well “challenge the dominance of undergraduate degree programs”, as workers look to upskill throughout their career.

According to Harvard Business Review, those who do not spend five to 10 hours a week learning online will become obsolete.

But while demand is expected to change, the current university system has a number of barriers preventing widespread uptake of continuous learning.

High fees make it difficult to justify investment versus return, while the reputation of universities as reputable yet “inflexible” institutions remains problematic.

Most of the students (84%) -- prospective, current and past -- believe it is necessary to continuously upskill.