Purpose: There is evidence that students who attend Technical and Further Education (TAFE) prior to entering higher education underperform in their first year of study. The purpose of this paper is to examine the role of self-efficacy in understanding the performance of students who completed TAFE in the previous year in a first year subject of microeconomics in a dual sector university in Melbourne, Australia. Design/methodology/approach: The study utilises data collected by surveys of 151 students. Findings: A student's self-efficacy is positively associated with their marks in a first year subject of microeconomics. However, the relationship between final marks and self-efficacy is negative for those students who attended TAFE in the previous year suggesting that they suffer from the problem of overconfidence. When holding self-efficacy constant, using econometric techniques, TAFE attendance is found to be positively related to final marks. Research limitations/implications: The findings are exploratory (based on a small sample) and lead to a need to conduct cross institutional studies. Practical implications: The research points to the need for early interventions so that TAFE students perform well in their first year of higher education. It also points to potential issues in the development of Victorian Certificate of Applied Learning (VCAL) programs. Originality/value: To the best of the authors' knowledge, this is the first paper to examine the inter-related impact of attendance at TAFE in the previous year and self-efficacy on the subsequent academic performance of TAFE students.