The goal could be to make sure some students never graduate. reports.

Why your first year of university could be a rip-off

It might seem far-fetched but there is already a financial incentive for Australian universities to accept more students and the US is grappling with how to deal with colleges that seem aimed purely at making a profit.

“The US obviously has some of the greatest research universities in the world … but we also have an entire sector of schools that thrive on the financial model,” Professor Susan Dynarski of the University of Michigan told a forum into university financing at the Australian National University last week.

“We have schools with graduation rates of 5 per cent, 10 per cent … schools that take the subsidy for the first year and the student drops out, so this can happen.”

Incoming ANU vice-chancellor Brian Schmidt told the forum that there had already been changes made to the Australian system that created an incentive for institutions to go after the student dollar.

“I’m not saying that everyone’s doing this but the reality is that if you teach lots of students poorly, you’re going to make lots of money,” Prof Schmidt said.