Three out of four children in Victoria’s care system are not finishing high school, and they are five times more likely to be suspended or expelled, with the children’s commissioner warning that Victoria is not the education state for all children.

An investigation into the school system by the Commission for Children and Young People has found the state’s most vulnerable students are being left behind and called for urgent reforms, including increasing the foster care allowance.

“Outcomes for children who have been in care are starkly worse,” Children’s Commissioner Lisa Buchanan said. “Whether you look at homelessness, whether you look at living below the poverty line, whether you’re looking at mental health presentations into emergency services — [outcomes are worse] across every indicator of success or otherwise in adult life.

“What we also know is that staying engaged in education is the key factor that can support a young person to thrive.   The fact that we’re not properly supporting them to stay in education is absolutely feeding some of these negative outcomes.”

Data in the commission’s study shows only 25 per cent of students in care progress from year 10 to year 12, compared with 80 per cent of children not in care. From 2019 to 2022, students from out-of-home care were physically restrained or secluded from classmates 338 times. Last year, they were seven times more likely than other students to be involved in these incidents.

Buchanan said the stark figures showed Victoria was not the education state for all children. The child protection system has been under increased scrutiny since it emerged a 12-year-old girl who was charged with murder while in state care had fled residential care hundreds of times.

Earlier this year, Buchanan urged the government and police to urgently improve the system after she released figures that showed 165 children had been sexually exploited in residential care in less than two years.

Her latest probe found pressure on the system was increasing due to staff shortages and a 13 per cent rise in young people entering the care system since 2019. Over that time, there was an 85 per cent rise in the number of children aged nine to 11 in residential care and a 10 per cent decline in foster care placements.

Buchanan said interviews had painted a picture of schools and teachers who did not understand how to handle the needs of these children, and they were being excluded at a much higher rate. “Trauma directly impacts development, and trauma directly impacts behaviours. Schools are not well equipped to respond to that, and they often respond in punitive ways by suspending or expelling these students.”

 The commission’s report recommends that all schools be expected to properly respond to children with trauma and provide resources for teachers to respond appropriately.

Kita Martin-Cu, 20, was in and out of the care system between the ages eight and 16. Kita, who completed year 12, said she found school challenging as she attended as many as 14 different schools, where staff did not understand her needs. “There should be trauma-informed training for teaching staff and other staff at schools, and a whole-school approach to trauma-informed care,” she said.

A spokeswoman said the state government had invested an extra $3.1 billion in the child protection system since 2019, including $895 million in the last budget. But opposition child protection spokeswoman Roma Britnell said these contributions were only in line with rising demand. “They’re continuing to do the same thing and getting the same result, or worse,” she said.