The State Education and Training Committee released the final report on Tuesday of its Inquiry into Geographical Differences in the Rate in which Victorian Students Participate in Their Education.

The inquiry, which is chaired by a State Labor MP, recommended that the Victorian Government advocate to the Federal Government that young people who are required to relocate to undertake tertiary studies be eligible to receive Youth Allowance.

Mr Chester said this report vindicated every protest and all 5000 signatures on the Gippsland petition calling on the Federal Government to abandon its plans to make it harder for country students to achieve the full independent rate of Youth Allowance.

The report found fewer students in regional areas applied for university courses compared to metropolitan areas and acknowledged that economic barriers were the main reason why less regional students attend university.

In his foreword to the report the committee chair, Labor MP Geoff Howard wrote that he was concerned that the specific circumstances of rural and regional young people had not been adequately addressed in the Rudd Government's proposed changes to Youth Allowance.

"It was the committee's view, and it is also my view, that all young people who must relocate to undertake their studies should be eligible to receive student income support at a level which recognises the additional costs of living away from home,'' Mr Chester said.

"There are many important recommendations in the report about increasing the aspirations of country students but until we address the fundamental issues of costs, university will remain a pipedream for many Gippslanders.''

Mr Chester said the State Parliamentary inquiry also found that the deferral rates were three times higher in regional areas compared to the city.

"The already excessive rates of deferral in regional areas will only increase under the Rudd Government's proposed changes to Youth Allowance and I am concerned that many students who defer will never return to full-time study to achieve their career ambitions,'' Mr Chester said.

"When you consider the skills shortages in regional areas, we should be doing everything in our power to help country kids achieve their full potential.''