University welcomes paid placements and debt relief for Newcastle students

With many living in placement poverty for unpaid labour, it will be a relief for about 68,000 university students and 5000 vocational education and training students, who will be eligible for a $319.50 payment each week, from July 2025.

University of Newcastle vice-chancellor professor Alex Zelinksy AO welcomes the announcement as "a lot of students are finding the current economic climate extremely difficult".

"Undertaking an unpaid placement is a requirement for students in some fields to become accredited or registered in their chosen profession as part of their degree, and this adds further stress," he said.

He said he was pleased to see the Federal Government starting to implement recommendations of the Australian Universities Accord.

"[This] is an important action to help ease financial pressures on students. We look forward to working with them on implementation."

The announcement is part of the federal government's May 14 budget and comes a day after the Commonwealth revealed it would wipe about $3 billion of student debt in an effort to appeal to young voters.

In response to the Universities Accord, the government will cap the HELP indexation rate to whichever is lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI).

The government will backdate this relief to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that existed on 1 June last year.

Last year the spike in indexation was 7.1 per cent, if the rate was based on WPI, it only would've been 3.2 per cent.

"We are doing this, and going further. We will backdate this reform to last year. This will wipe out what happened last year and make sure it never happens again," Education minister Jason Clare said.

An individual with an average HELP debt of $26,500 will see around $1,200 wiped from their outstanding HELP loans this year, pending the passage of legislation.

Professor Zelinsky said changes to the indexation system will help achieve a national tertiary education system that is stronger and more equitable, and he welcomed the reforms.

"Committing to a university education remains a strong investment in a person's future, we are aware cost of living can influence a person's decision to come to university," he said.

"We know that a degree such as midwifery, costs $15,000 but each and every one of our students has made an investment in their future, and we know that they will reap the benefits of this investment for a lifetime."

"Changes to HECS indexation will make a significant difference for students with a HELP debt and will also contribute to widening access to education and diverse career opportunities."

Prime Minister Anthony Albanese said the initiatives on student pay and debt will help expand access to education and ensure no-one is left behind.

"We're proud to be backing the hard work and aspiration of Australians looking to better themselves by studying at university," he said.

Universities Australia executive Luke Sheehy said the payments will prevent students from having to choose between study and paying the bills.

"These students can't graduate without practical experience, but too many are being held back by placement poverty which can be the difference between commencing and completing a degree," he said.

While the Australian Services Union and the Australian Nursing and Midwifery Federation welcomed paid placements for their future workforces, the Australian Education Union (AEU) urged the government to do more.

The AEU's federal president Correna Haythorpe said changes are needed to help those who had already embarked on their careers.

The government also announced it would spend $50.2 million on scholarships for nurses and midwives, allowing them to upskill.