Among the salient features of the Australian higher education context is the Federal Government’s objective of expanding opportunity and choice in higher education. This objective involves the creation of a policy framework that encourages universities to meet community and student needs by diversifying their course offerings and providing enhanced levels of information on the nature and quality of these courses for prospective students.

The West Review (1998, p. 100) proposed that one mechanism for increasing the choices available to prospective students would be a student-centred funding framework for teaching and learning. In recommending this framework, the Review argued that funding linked more directly to student choices would bring particular benefits to students and to the higher education system, including:

incentives to encourage students to choose their studies carefully, while encouraging providers to compete vigorously in terms of the nature, price and quality of their offerings.

Competition in the provision of higher education has a number of significant features, not least that it influences the relationship between prospective students and universities, and links both institutional and student decision-making more directly to market mechanisms.

In a more competitive context for attracting students, universities can be expected to develop niches in the marketplace and to seek actively to influence student choice by intensifying their marketing endeavours. Institutional advertising is now conducted on a large and vigorous scale as institutions strive to create segmented markets and to build their profiles and shape their public images. The effects of this marketing are strongly evident in undergraduate recruitment strategies, not least in the increased efforts by some universities to encourage high-achieving school students to move interstate for their higher education, a previously uncommon practice in Australia.

For their part, prospective students are expected to act as more informed consumers when making decisions about their higher education. They are faced with a large array of choices and information on which to make a decision, and it is anticipated that they will be able to make sense of the alternatives available to them and to discern the appropriateness of particular choices to their needs and objectives. Of course, their final decisions have considerable consequences. In exercising their choices, prospective students not only make decisions with significant implications for their future lives and careers, but also wield considerable influence over institutional planning and directions. Doubtless this influence would be greatly magnified and more far-reaching if student-centred funding arrangements were in place.

The transformation of Australian higher education into a market-based system invites questions about the processes and logic of student decision-making at the time of university application, and about the accuracy and usefulness of the information on which students base their choices. As the competition for students increases and as courses diversify, intending students will have before them unprecedented amounts of information, some of which is provided by commercial sources.

Prior to this study, little was known of whether and in which ways prospective students discern between courses and universities, nor of how they interpret and act on the various information sources available. There was sufficient evidence, however, that the critical decision-making period for prospective students is a problematic one, especially for school-leavers. Our 1995 work on the first year experience (McInnis & James 1995) highlighted the problems with the transition to university in Australia: among other things, about one-third of first year students seriously consider deferring during the first semester. At least some of this transition problem appears to be the result of an inappropriate choice of course and/or institution: we found that one-third of first year students believe that, looking back, they were not ready to choose a university course during their final school year. Research in the United Kingdom (Yorke 1999) has traced non-completion partly to poor advice and decisions on courses and institutions.

This is not to say that prospective students are unclear about their objectives or reasons for enrolling. When we surveyed first year students in 1995 (McInnis & James 1995, pp. 30–31) we found that, as with the present study, the overwhelming motivation for most students is to study in fields that interest them. In addition, the majority are quite clear about their reasons for enrolling and the type of occupation they seek. These earlier findings suggest that the disquiet experienced by many students during their first year on campus may be a result of courses and institutions that do not match their needs and objectives, rather than any uncertainty or lack of purpose on their part.

There is also a new set of issues associated with equity target groups and how they might take advantage of expanded opportunities and choices. The Australian higher education system still faces massive difficulties in effectively attracting two groups of ‘non-traditional’ students. Notwithstanding some complexities in defining and measuring the participation of population subgroups, most recent estimates continue to indicate alarming imbalances. Current figures suggest that, on a per capita basis, for every ten urban people who attend university, roughly six rural/isolated Australians do so (James et al. 1999). The situation for people from lower socioeconomic backgrounds is worse: similar estimates on a per capita basis suggest that only five people from lower socioeconomic backgrounds attend university for every ten people of medium or higher socioeconomic backgrounds. Admittedly, with the expansion of access to higher education of the past decade, the higher education participation rates of ‘non-traditional’ student groups have improved, but their relative participation shares have altered little. Careful monitoring is required to judge how educationally disadvantaged people are faring in a system focused more explicitly on encouraging informed student choice, particularly those who would be ‘first generation’ university students and whose families have less experience with higher education.

It has not been possible in this brief discussion to give full consideration to the complexity of the market in higher education provision, but this overview has served to emphasise the considerable importance of understanding how the market operates, and how prospective students exercise their choices. This knowledge is valuable from a number of perspectives: for maximising individual student opportunities, for ensuring equitable access to disadvantaged groups, and for ensuring the quality of the system overall.