Employers and state governments could help pay worker's student debts in a bid to encourage graduates to stay in industries experiencing worker shortages.
A major review, known as the Universities Accord, released its interim report on Wednesday and said Australia's student debt policy needed a refresh to stop discouraging people pursuing higher education.
The report outlined 70 recommendations for consultation before a final report due in December.
This included changes to the Higher Education Loan Program (HELP) which the review said was not working well enough.
"HELP is now over 30 years old and needs a refresh," the report said.
"As a result of this lack of policy attention, access to student income support is declining and services that might support student success are lacking.
"New ideas must be explored to prevent excessive debt and rising student cost of living pressures from discouraging people of all ages from pursuing higher education and completing their qualifications."
Higher education loans are indexed in line with inflation on June 1 each year, but runaway price rises have caused balances to spiral and many graduates are tipped to be worse off than when they finished their studies.
In 2023, more than three million Australians had their student debt increase 7.1 per cent.
The review said it was considering "the most appropriate way to reduce the volatility of the current indexation method" and the timing of when it is applied.
Education Minister Jason Clare said the taxation office was looking at indexation, but he did not believe people made a decision about studying based on the cost of a degree.
But National Union of Students president Bailey Riley said this ignored what students were saying.
"The cost of a degree may not have been considered a decade ago but now it is and we hear that a lot on the ground," she told AAP.
"It's disappointing the HELP system was not touched upon enough in the interim report and there weren't any big ideas to change it."
The report acknowledged repayments could be burdensome because they were based on income.
It described this as a repayment cliff, where the amount of debt a person repays can increase significantly over small income ranges.
But larger scale debt forgiveness is unlikely to feature in the final report, with the panel focusing on targeted approach for industries facing worker shortages.
For example, it proposed government employers waive HELP debts for nurses and teachers to encourage graduates to stay in these professions, or covering a proportion of HELP debt for every year workers stay.
"Expanded write offs would also limit options for other policy changes to HELP, as anything which increases repayment times would come at an even greater cost," the report said.
Before the final report is handed down, the panel resolved to examine the impacts of large debts on graduate's ability to enter the housing market.
