An analysis of Government-funded students and courses, January to September 2025
Source: National Centre for Vocational Education Research (NCVER), January 2026
Published by CAQA | caqa.com | VET Sector Magazine
The numbers are in, and they demand attention. The National Centre for Vocational Education Research has released its Government-funded students and courses data for January to September 2025, and the headline figure tells a story that every RTO in Australia needs to understand: 1,027,380 students undertook government-funded training in that period, a decrease of 72,225 students, or 6.6%, from the same period in 2024.
This is not a minor statistical fluctuation. It is the largest year-on-year decline since the post-COVID correction, and it comes at a time when the sector is simultaneously navigating the transition to the Standards for RTOs 2025, changes to Fee Free TAFE eligibility, shifts in employer incentive programs, and a tightening labour market that is reducing the urgency for upskilling. For RTOs that depend on government-funded enrolments, this data is not just a report to be filed. It is a signal to be acted upon.
This article breaks down the NCVER data, examines where the losses are concentrated, identifies the areas of growth, and considers what all of it means for the RTOs and trainers who deliver vocational education across the country.
The National Picture: A Broad-Based Decline
The 6.6% decline in government-funded VET students is not concentrated in one state or one qualification level. It is a national contraction. Every state and territory reported lower student numbers with just two exceptions: South Australia, which grew by 2,615 students (4.0%) to 67,915, and Western Australia, which grew by 1,875 students (1.6%) to 118,190.
New South Wales, which has been subject to significant data remediation for the period 2020 to 2024, continues to show instability in its reporting. NCVER has noted that NSW data may remain overstated for 2025, meaning the actual decline could be even steeper than the published figures suggest. Victoria's numbers have also been affected by corrections to previously overstated program completions for 2015 to 2022. Western Australia's figures have been impacted by reporting changes associated with a new approach to foundation skills introduced in January 2025, including the expiry of two key courses (CAVSS and USIQ) in December 2024.
In practical terms, this means that even the 6.6% national decline should be interpreted cautiously. The underlying trend, once data quality issues are resolved, may prove to be sharper in some jurisdictions than the current figures indicate.
Nationally Recognised Qualifications: Where the Volume Lives
Nationally recognised qualifications comprise the bulk of government-funded training, and it is here that the decline is most visible. There were 925,600 students enrolled in nationally recognised qualifications in January to September 2025, a decrease of 68,840 (6.9%) from the same period in 2024. However, this figure still represents an increase of 48,430 (5.5%) compared with the same period in 2019, which provides some longer-term perspective: the sector remains above pre-COVID levels, but the trajectory has shifted decisively downward from the peaks of 2023 and 2024.
The decline in qualification students mirrors the decline in qualification enrolments, which fell by 97,500 (8.7%) to 1,019,080. The steeper decline in enrolments compared with students suggests that individual students are enrolling in fewer qualifications, a pattern consistent with either reduced availability of concurrent funding or greater caution among students about taking on multiple programs.
Where the Losses Are Concentrated
The two qualification levels experiencing the sharpest declines are Certificate IV, down 33,430 students (15.3%), and Certificate III, down 29,790 students (5.7%). These are not peripheral qualifications. Certificate III is the backbone of trade training and the entry-level qualification for dozens of occupations. Certificate IV is the pathway to supervisory and paraprofessional roles across community services, business, training and assessment, and health. A combined loss of over 63,000 students at these two levels alone signals a significant contraction in the pipeline of qualified workers entering the Australian economy.
Only South Australia (up 4.4% to 60,525), Western Australia (up 0.7% to 104,660), and the Northern Territory (up 15.2% to 10,875) showed growth in nationally recognised qualification enrolments. The Northern Territory's 15.2% increase is notable but represents a small absolute number (1,440 additional students), reflecting the Territory's comparatively small VET system.
By Occupation: Every Category in Retreat
Perhaps the most striking finding in the NCVER data is that qualification enrolments declined across every occupational category. There were no areas of occupational growth. The two largest declines were in Community and Personal Service Workers, down 29,830 (8.8%), and Clerical and Administrative Workers, down 28,315 (25.3%). The decline in Clerical and Administrative Workers was driven primarily by a 37.1% decrease in New South Wales, which NCVER attributes to a combination of changes to the Fee Free TAFE program, changes to employer incentives for apprenticeships, and tight labour market conditions.
The scale of the decline in Community and Personal Service Workers is particularly significant given that this occupational group encompasses aged care, disability support, child care, and community services, sectors that are experiencing acute workforce shortages. If fewer students are enrolling in qualifications that lead to these roles, the gap between workforce demand and qualification supply will widen further. For RTOs delivering in these areas, the decline should prompt serious questions about whether the funding settings, marketing approaches, and delivery models currently in place are sufficient to attract and retain students.
Technicians and Trades Workers also declined, down 6,490, alongside Professionals (down 8,295), Managers (down 5,770), Sales Workers (down 6,105), Machinery Operators and Drivers (down 3,070), and Labourers (down 3,180). The universality of the decline across all occupational categories suggests that the drivers are systemic rather than sector-specific.
By Training Package: Business Services and Community Services Lead the Decline
At the training package level, the data reveals where the decline is hitting hardest. Business Services recorded the largest absolute decrease, down 27,445 enrolments (29.1%). A decline of nearly 30% in a single year in one of the highest-volume training packages is remarkable and warrants careful analysis. This training package includes the BSB qualifications that underpin business administration, management, leadership, and human resources, qualifications that are delivered by a large proportion of Australia's private training providers.
Community Services recorded the second largest decline, down 22,950 enrolments, although it remains the training package with the highest total enrolments at 216,760 (23.6% of all training package qualification enrolments). The continued dominance of Community Services in absolute terms, despite the significant decline, reflects the sheer scale of government investment in care sector qualifications.
The only training package among the top ten by change that recorded growth was Electrotechnology, up 5,055 (7.9%). This likely reflects sustained demand for electricians and the growing electrification of residential and commercial construction, a trend that shows no signs of abating as Australia transitions toward renewable energy. Health (down 4,455), Tourism, Travel and Hospitality (down 4,295), Property Services (down 4,195), Retail Services (down 3,500), Financial Services (down 3,410), Agriculture, Horticulture and Conservation and Land Management (down 2,950), and Construction, Plumbing and Services Integrated Framework (down 2,860) all declined, rounding out a picture of broad-based contraction across the sector.
By Provider Type: TAFE and Private Providers Both Hit
The decline in students is not confined to one provider type. Both TAFE institutes and private training providers reported decreased enrolments. TAFE institutes enrolled 511,325 students in nationally recognised qualifications, down 6.5% from the same period in 2024. Private training providers enrolled 326,335 students, down 9.5%. Other providers (universities, schools, community education, and enterprise providers) enrolled 105,225, down marginally from 107,330.
The sharper decline at private training providers (9.5% versus 6.5% for TAFE) is noteworthy. It may reflect the impact of changes to Fee Free TAFE eligibility, which shifted some demand toward TAFE, or it may reflect broader market dynamics, including the tightening regulatory environment and the transition to the new Standards. Private providers are typically more responsive to market signals but also more vulnerable to shifts in government funding policy. A nearly 10% decline in a single year is a serious signal for the private provider segment.
It is worth noting that TAFE remains the dominant provider, enrolling more students than private providers and other providers combined. However, the long-term trend shows private providers growing from a low of 295,190 in 2018 to a peak of 368,365 in 2023, before the current decline. The question for the sector is whether this decline is cyclical or structural.
Priority Cohorts: Bright Spots in a Declining Landscape
Against the backdrop of an overall decline, several priority cohorts showed growth, providing evidence that government investment in equity and access is producing results in targeted areas. Students with a disability increased by 7,960, Indigenous students increased by 1,695, and students at school increased by 945. These are meaningful increases that suggest the sector is becoming more inclusive even as overall numbers contract.
However, all other priority cohorts declined. Female students decreased by 46,715, a disproportionate decline relative to the overall 68,840 student drop. Full-time students decreased by 7,025. Regional and remote students decreased by 15,430. Unemployed students decreased by 6,035, although NCVER notes this figure should be interpreted in the context of the prevailing unemployment rate, which remained low through the reporting period. Young people under 25 decreased by 2,490.
The decline in regional and remote students, down 15,430, is a particular concern. These communities are often the most dependent on government-funded VET for workforce development, and a decline of this magnitude suggests that barriers to access, whether related to delivery location, digital infrastructure, or program availability, may be worsening rather than improving.
Short Courses: The Sharpest Decline
One figure in the NCVER data stands out for its severity: short course enrolments declined by 18,150, or 33.1%, to 36,640 students. This is the steepest proportional decline across any training type. Short courses, which include accredited courses and training package skill sets below qualification level, have been a feature of several government initiatives, including COVID-era upskilling programs and components of the Fee Free TAFE initiative.
A one-third decline in short course participation suggests that the policy settings which drove rapid growth in this area are being wound back, and that students are either not being attracted to, or not being funded for, non-qualification training at the same rate as in previous years. For RTOs that built delivery capacity around short courses, this decline is acute and requires an immediate strategic response.
Accredited courses specifically declined by 16,450 (39.2%), while locally developed courses saw a contrasting increase of 7,090 (49.4%) to 21,460. This divergence is worth watching. It may indicate that states and territories are increasingly funding locally designed training solutions to meet specific jurisdictional needs, while nationally accredited short courses lose momentum as COVID-era funding winds down.
What Is Driving the Decline?
The NCVER data itself does not explain causation, but several converging factors are clearly at work.
Changes to Fee Free TAFE: The Fee Free TAFE program drove significant enrolment growth in 2023 and 2024. While Fee Free TAFE activity falls within the scope of NCVER reporting, it is not separately identified in the data, making it difficult to isolate its impact precisely. However, NCVER notes that training demand in 2024 was affected by changes to the program, and it is reasonable to infer that further adjustments in 2025 have contributed to the decline, particularly in short courses and Certificate IV qualifications.
Tight labour market conditions: When unemployment is low and jobs are readily available, the incentive to undertake training diminishes, particularly for people already in employment. The decline in unemployed students (down 6,035) and the decline in full-time students (down 7,025) are both consistent with a labour market that is pulling people into work rather than training.
Changes to employer incentives: NCVER specifically identifies changes to employer incentives for apprenticeships as a factor affecting demand in New South Wales. Similar dynamics may be at play nationally, with reduced incentives leading to fewer training contract commencements.
Data remediation effects: Significant remediation of New South Wales data for 2020 to 2024, corrections to Victorian program completions for 2015 to 2022, and Western Australia's reporting changes for foundation skills all complicate year-on-year comparisons. Some of the apparent decline may reflect more accurate counting rather than a genuine loss of training activity.
Regulatory transition: The transition to the Standards for RTOs 2025 requires significant investment of time and resources from providers. Some RTOs may be focusing on compliance readiness rather than enrolment growth, and the uncertainty inherent in any major regulatory transition may be dampening both provider and student confidence.
What This Means for RTOs
For RTOs operating in the government-funded space, this data carries several practical implications.
Diversification is no longer optional. RTOs that are heavily dependent on a single funding source, a single qualification level, or a single training package are most exposed to the kind of decline this data reveals. The 29.1% drop in Business Services alone would be enough to threaten the viability of a provider whose scope is concentrated in BSB qualifications. RTOs need to actively diversify across training packages, funding sources, and delivery modes.
Watch the Certificate III and IV pipeline. A combined loss of more than 63,000 students at Certificate III and IV levels is a workforce development concern that extends beyond individual RTOs. Employers who rely on these qualifications for entry-level and supervisory roles will face growing difficulty in sourcing qualified candidates. RTOs that can demonstrate strong employment outcomes and industry connections at these levels will be better positioned to maintain enrolments even in a contracting market.
Understand your state dynamics. The data varies significantly by jurisdiction. South Australia and Western Australia are growing while most other states are declining. RTOs operating across multiple jurisdictions need to understand the specific policy, funding, and market dynamics in each state rather than applying a one-size-fits-all strategy.
Electrotechnology is the standout growth area. With a 7.9% increase in enrolments, Electrotechnology is the only major training package showing growth. RTOs with scope in this area should be investing in capacity. RTOs without scope should consider whether adding electrotechnology-related qualifications is viable.
Priority cohort growth is a strategic opportunity. The growth in students with a disability, Indigenous students, and school-based students represents both a social good and a market opportunity. RTOs that develop genuine expertise in supporting these cohorts, through culturally responsive delivery, accessible learning environments, and effective support services, will benefit from continued government investment in equity-focused programs.
Short course strategy needs reassessment. The 33.1% decline in short courses is a clear signal that the conditions that drove rapid growth in this area have changed. RTOs that built delivery capacity around short courses need to determine whether this decline is temporary or permanent and adjust their resource allocation accordingly.
The Bigger Picture
The 6.6% decline in government-funded VET should not be read as evidence that vocational education is in crisis. Australia's VET system still served over a million government-funded students in the first nine months of 2025, and overall enrolments remain above pre-COVID levels. The growth in priority cohorts demonstrates that the system is reaching people who were historically underrepresented.
But the decline is real, it is broad-based, and it is concentrated in the qualifications and occupations where Australia has its most pressing workforce needs. Community services, business administration, health, and the trades are all showing fewer enrolments at a time when employers in those sectors are struggling to find qualified workers. That disconnect between training supply and workforce demand is the central challenge the data reveals.
For RTOs, the response cannot be to wait for enrolments to recover. The data suggest that multiple structural factors, from policy changes to labour market conditions to regulatory transition, are converging to create a more constrained environment for government-funded training. The providers that thrive in this environment will be those that diversify their offerings, deepen their industry connections, invest in supporting priority cohorts, and build delivery models that are responsive to the realities their students and employers are facing.
The NCVER data is a mirror. It shows the VET sector as it is, not as we might wish it to be. What we do with that reflection is up to us.
Data source: NCVER 2026, Government-funded students and courses, January to September 2025,
NCVER, Adelaide. Published under Creative Commons Attribution 3.0 Australia licence.
