Charles Sturt University (CSU) Vice-Chancellor Professor Andrew Vann has welcomed a review of the demand driven funding system released by the Federal Government this week.

Introduced in 2012, the demand driven funding system uncapped the number of Commonwealth funded places public universities could provide for bachelor-degree courses.

A review of the system released by the Government has found the greater flexibility and responsiveness it provides has created a better fit between the skill needs of the wider economy and the skills possessed by university graduates.

Professor Vann said the system had been a success story for universities and the communities they served.

"Allowing universities to allocate places based on market demand means each institution is able to work more collaboratively with its communities to focus on areas of need," he said.

"Charles Sturt University has been able to use the freedom provided by the demand driven system to increase student numbers and hence access for rural and regional students, as well as metropolitan students studying by distance education.

"It is very encouraging to see the review conclude the demand driven system has not led to a reduction in quality. Instead, it has provided better access for students and encouraged universities to provide innovative courses to meet student and workforce need."

Professor Vann said he shared the review's view that the demand driven system has not affected quality.

"The review notes both the community and potential employers rely on universities to produce a high level of knowledge and skills in graduates," Professor Vann said.

"As a regional institution working with communities experiencing skills shortages in a number of areas, this is a responsibility Charles Sturt University feels very keenly.

"That's why we work so closely with industry to develop and review our courses, and why we put so much emphasis on workplace learning and practical skills.

"Charles Sturt University graduates have a reputation for being practically focussed and highly skilled from day one, which is why our graduate employment rate is consistently one of the best in the country.

"We're very proud of the outcomes we help our students achieve, but also of the impact our graduates have made on rural and regional workforce shortages. I believe the demand driven system has given us the flexibility to continue to improve on those outcomes in the years ahead.

"Including sub‑bachelor higher education courses in the demand driven system would also allow us to create offerings which would help less prepared students progress into higher education."

Professor Vann cautioned some recommendations in the review would need careful consideration, and any impacts on regional students should be taken into account.

"The recommendations about postgraduate places and the extension of Commonwealth supported places to private providers could have far-reaching implications that need to be worked through," he said.

"And we must be careful to ensure any further changes to the system don't disadvantage rural and regional students, who have typically been less well represented in tertiary education. We know that cost is a greater issue for them than metropolitan students.

"But I think the review's finding the demand driven system has improved student access, created greater responsiveness to student demand, driven innovation and improved quality is a fair assessment and a strong endorsement."