By Andrew Brown and Jacob Shteyman in Canberra

Students are set to have thousands of dollars wiped off their HECS debt, while paid placements will be put in place for in-demand professions as part of sweeping university changes.

Laws introduced to federal parliament on Thursday will cap the indexation rate for the Higher Education Loan Program (HELP).

Under the changes, the indexation rate would match either the rate of inflation or the wage price index, depending on which is lower.

The move came after students were slugged with a 7.1 per cent increased in their student debts following surging inflation.

Education Minister Jason Clare said the move would result in almost $3 billion of student debt being eliminated, with the average student to see a $1200 decrease in their loans.

“We have a good education system, but it can be a lot better and a lot fairer,” he told parliament on Thursday.

“(The changes) will provide significant relief for people with a student debt, while continuing to protect the integrity and the value of the student loan system, which have massively expanded tertiary access for more Australians.”

Those with a debt of $45,000 will see a reduction of about $2000, while students with $60,000 owning will have debt lowered by $2700.

The reforms came following the release of the Universities Accord, a wide-ranging review of the tertiary sector handed down in February.

The laws will also allow university students undertaking practical work as part of their degrees be able to receive payments during their placements.

Students in degrees such as nursing, midwifery social work will receive an allowance of $319 per week.

“A lot of students tell me that when they do their prac, they have to give up their part time job, or they’ve got to move away from home or work fewer hours,” Mr Clare said.

“(The payments) will give people who signed up to do some of the most important jobs in this country a bit of extra help to get the qualifications that they need. This is practical support for practical training.”

Funding for fee-free university courses as a bridging course between schools and tertiary education is also part of the legislative reform.

Labor needs the support of the opposition or the crossbench to secure the bill’s passage through the upper house, but Mr Clare is optimistic it will get through.

“There have been a number of members of the crossbench that have campaigned for this reform, amongst them (independent MP) Monique Ryan, and I’m confident that we’ll have their support for this legislation,” he said.