Universities won't be burdened if they have to manage cost-of-living payments to students while they are on practical placements, commonwealth officials say.
However, senior officials from the federal Education Department did tell a parliamentary inquiry into the plan that there might be teething issues.
Under the federal proposal, teaching, nursing, midwifery and social work degree students will be paid $320 a week while on placements to help cover living expenses.
Universities will be expected to administer payments for their students, while the Education Department will deliver payments for those in VET courses.
While universities have indicated they aren't in favour of managing the payments, Education Department Secretary Madonna Morton told the inquiry that the tertiary bodies wouldn't be disadvantaged.
"It's not overly administratively burdensome for the universities," she told the Senate inquiry sitting in Sydney on Tuesday.
"This is a new program, we expect there will be issues that we will learn along the way ... we will have consultation mechanisms in place with the sector to be working with them on how it's feeling for them."
The Group of Eight, representing Australia's largest universities, say they aren't properly equipped.
"There has been no explanation as to why a government agency, such as Centrelink or (the Department of Employment) - similar to the arrangement for VET students - cannot administer (placement payments) for students," the Group of Eight said in a submission to the inquiry.
Meanwhile, the National Tertiary Education Union said the payments should be extended to all students required to do placements as part of their degree.
In its submission to the inquiry, the union said while it welcomed the reform, many other students are forced to forgo their regular income while undergoing placements.
"If student placement poverty is to be addressed in any substantial form, then the prac payment should be expanded to include all fields of study requiring professional placement," the union said.
"We are also concerned that the rate of payment is not sufficient and that the delay in its introduction is disadvantaging current students."
It comes as the Group of Eight's deputy chief executive Matthew Brown told the inquiry that changes to university funding from 2020 had been an "all-around disaster" and needed to be fixed as soon as possible.
Dr Brown said the changes made under the former coalition government's Job Ready Graduates program had hit students in humanities, arts and social sciences the hardest.
"All around it's been a disaster," he said.
"We've called from the start ... for it to be removed and replaced.
"Now that's no small undertaking to redesign the system to repair what's happened.
"But it's something that needs to be done nonetheless, and sooner rather than later."
Under the program, funding arrangements were altered in a bid to re-direct students into particular courses by changing fee-contributions.
