The social environment prevailing within higher education institutions in Australia has seen many changes in recent years. Many factors have contributed to these changes and this paper explains the areas in which student life in Australia has changed and the challenges these changes have posed to students. This paper argues that universities in Australia and elsewhere need to prepare themselves to cope with the rapidly changing needs of their students. Information technological tools such as Internet chat room could be one of the cheapest and student-friendly tools which universities could use to meet the social and psychological needs of their students. A chat room was created for the students of Flinders University (Adelaide, Australia) and this paper explains the ways in which this chat room was used by the students. Based on the observations made, this paper highlights the fact that chat rooms could be a useful tool for universities in this day and age. (Contains 1 figure.)