As thousands of university students protested around Australia at the prospect of heavy cuts in higher education spending, the Australian Vice Chancellors' Committee released figures showing that enrolments had jumped by 8 per cent between 1995 and 1996.

Fay Gale, AVCC president, said the figures demonstrated that demand for places at university was very high and that any significant cuts would see thousands of Australian students "frustrated in their efforts to better their futures through a university education".

Professor Gale said universities had gone as far as they could to satisfy the community's demand for higher education - even beyond the levels required of them by the federal government - by accepting 4 per cent more students than government subsidies had provided for.

"Over the past ten years, there has been a steady decrease in the operating grant per equivalent full-time student," she said. "The system is becoming more and more thinly stretched, putting at risk the high quality of an Australian university education. Further cuts would simply suck the life-blood out of universities."

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On the vice chancellors' figures, Australian universities enrolled a record 644,000 students this year - up by more than 40,000 on 1995. More than 112,000 students have begun their university studies for the first time.

More than 50,000 fee-paying foreign students are also on Australian campuses in 1996, an 11 per cent increase on last year's number.

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Professor Gale used this to point out to the government the possible impact on Australia's education export industry if universities were subject to heavy budget cuts.

Foreign students are now estimated to contribute Aus$2 billion (Pounds 1 billion) to the Australian economy each year.

Vice chancellors have warned the government that this source of revenue could be drastically affected if overseas students believe the quality of education offered in Australia is likely to decline. In a letter to prime minister John Howard, Professor Gale said universities had been required to absorb a reduction in funding per student of 10 per cent since 1983 and to pay an unfunded salary increase for staff of 2 per cent last December. She said universities had been gratified by the promise made by the conservative parties before the election that if they were elected Commonwealth funding to universities would be maintained.

"You will understand therefore the vice chancellors' deep concern at the prospect of significant cuts to universities' grants," Professor Gale said. "They are concerned about maintaining the quality of our universities, maintaining opportunities for students, the ability of universities to retain and recruit staff, and the devastating effect cuts to universities will have on local and regional communities."

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Vice chancellors, along with their staff and students have stepped up their campaign of protests against the cuts, with students holding protest rallies around the country last week and academics calling for a 24-hour nationwide strike scheduled for yesterday.