The University of Melbourne has again been crowned the best higher education institution in Australia.

Figures released by Simon Birmingham, the Australian Federal minister for Education, on Wednesday revealed that the University of Melbourne has the highest rate of degree completion in the country at 88 per cent between 2009 and 2014, Xinhua news agency reported.

Margaret Shiel, acting Vice-Chancellor of the university, said the completion rate came as a result of the institution imposing strict requirements on incoming students.

Shiel said the model had also given students flexibility to "find their way" which had improved retention rates. "The curriculum allows them to try different things," she told Fairfax Media.

"Often they find something that is more appealing and more attractive. It opens up more opportunities," she said.

The data also revealed that a third of university students nationwide were not completing their degrees within six years.

Victoria's Federation University recorded the worst completion rate with just 52.5 per cent of students who began their degree in 2009 having finished it by 2014.