REFORMS to Australia's financial support scheme, Austudy, will hit thousands of potential students, according to researchers at Monash University in Melbourne.

Their investigation indicates that more than 60,000 students will be affected and that many may decide it is now too expensive to go to university or to re-enrol.

Under the changes, many students will receive lower Austudy benefits in 1997 than they had in the past or will be ineligible for any grants at all.

In its first budget, the new conservative government of prime minister John Howard announced that the family means test for Austudy would be made stricter so that fewer Australians will benefit. The age at which students are said to be independent - and therefore entitled to the full Austudy grant - was raised from 22 to 25.

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In a report in the Monash journal People and Place, Bob Birrell and Ian Dobson note that the education department estimated tightening the family means test would make "a remarkably high" 17 per cent of all students receiving Austudy ineligible while over half would see benefits reduced.

The study found that more than 50,000 students in the 22 to 24 age group will be affected, as will a substantial proportion of the 16,000 students aged 25-plus, since many will have started their courses before turning 25 and under the new rules will no longer automatically receive Austudy as independent.

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Only those students who start a new course aged 25 or more will receive the full allowance.

The researchers say about 60,000 university students overall will have to face the new means test on their family's income and assets if they are to retain the benefit or some fraction of it.

"If there are no major changes in the age distribution of students, we can say that over the long term some 60,000 out of the current 190,000 ÖйúAƬ Austudy recipients will potentially be affected by the new age ruling," the researchers say.

The impact on "independent" students is likely to be severe, they say. Combined with a sharp rise in tuition charges imposed under the ÖйúAƬ Contribution Scheme, cutting down on Austudy benefits could cut enrolments.

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"It is likely that some of these (older) students have delayed their entry into ÖйúAƬ precisely in order to gain assistance from the age-based independent Austudy benefit.

"Some of those ineligible yet unable or unwilling to depend on their parents may have delayed entry in order to gain Austudy (but) this option will no longer exist."

"As young adults, how many will even feel inclined to seek parental assistance to replace the Austudy income? Such students will be hit two ways: by the higher HECS payments and the Austudy proposals," the researchers say.