Avondale College in south-west Lake Macquarie has been approved as the first "university college" in Australia.
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A federal agency for higher education approved the change.
"It's a huge step," said Avondale's vice-chancellor and president, Professor Ray Roennfeldt.
"We're delighted for the college, but primarily for our students."
A name change is planned, but not finalised.
"The big thing for our students is, they get an award with university in its name," Professor Roennfeldt said.
"And it's a lot easier to advertise overseas with university in the title."
It's the next step in a bid for full university status. To achieve university-college status, Avondale had to show it could meet full university requirements within five years. It must provide undergraduate and postgraduate courses in at least three fields of study and "higher degree-by-research courses" in at least one of those fields. Further, it must conduct research that "leads to the creation of new knowledge and original creative endeavour".
It must commit to the "systematic advancement and dissemination of knowledge". Professor Roennfeldt said Avondale was on track to reach "full university status in five years".
The Tertiary Education Quality and Standards Agency, which approved the new status, said it would increase "quality and choice for students".
"It further bolsters Australia's world-class tertiary education sector," the agency's chief executive Anthony McClaran said.
Professor Roennfeldt said Avondale was the first higher education provider for which the agency had approved a change of category.
"This is a huge moment for us and the whole higher education sector," he said.
Avondale College, established in 1897, is part of the Seventh-day Adventist system of universities and colleges. Its largest campus is in Cooranbong. It also has a campus at Sydney Adventist Hospital in Wahroonga.
"About 50 per cent of our students are Seventh-Day Adventists and 50 per cent follow other religions or no religion," the professor said.
"We say that we're offering higher education within a Christian context. Our values, for instance, are excellence, spirituality, wellbeing, integrity and service."
Avondale encourages service to the community and humanity.
"That's very much a Christian value," he said.
Avondale has 1057 students taking courses in six schools - business, education, humanities and creative arts, ministry and theology, nursing and science. Courses range from certificates and diplomas to undergraduate and postgraduate degrees, including doctorates.
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