The Cost-of-Living Crisis and Unpaid Internships in Australia: Why Change Is Overdue

The cost-of-living crisis is killing unpaid internships — and that's a good thing

For years, unpaid internships were treated as a necessary rite of passage. You wanted the experience, you did the time for free. For students from wealthy families who could afford to work without pay, it was manageable. For everyone else, it was a barrier dressed up as an opportunity.

Australia's cost-of-living crisis has made that barrier impossible to ignore.

The numbers tell a stark story

Rent in Australian capital cities has surged dramatically over recent years, with many students spending well over 30 per cent of their income on housing alone. According to Jobs and Skills Australia, financial stress is one of the leading reasons students disengage from study — and it's a particular problem for first-generation university students, students from regional areas, and those from low-income households.

When an internship is unpaid, or poorly remunerated, it isn't accessible to everyone. A student working two part-time jobs to cover rent doesn't have the luxury of adding three days a week of unpaid work experience. A student who has to travel 90 minutes each way to a placement that doesn't cover transport costs is being asked to subsidise their own professional development. These aren't edge cases — they're common realities for a significant proportion of Australia's student population.

The equity cost to institutions

Here's what often gets missed in this conversation: the equity problem isn't just bad for students. It's bad for universities and TAFEs.

When access to quality internships is skewed towards students who can afford to work for free, graduate outcome data reflects that skew. Institutions that serve diverse student populations — regionally based universities, TAFEs with high proportions of mature-age or part-time students, institutions in lower socioeconomic catchments — are particularly exposed. If your WIL participation rates are low among students who need it most, your graduate employment data will show it.

There's also a reputational dimension. Increasingly, students, their families, and the broader community are asking hard questions about whether universities are genuinely committed to equity or just paying lip service to it. An internship model that structurally excludes disadvantaged students is difficult to defend.

What fair looks like

The Fair Work Act sets the legal baseline — unpaid placements must be genuinely educational and not displace paid workers — but legal compliance is a floor, not a ceiling. Leading institutions are going further.

Some are working with industry partners to make all placements paid, even at modest rates. Others are offering stipends to students who can demonstrate financial need, funded through philanthropic partnerships or industry levies. Flexible scheduling — evening placements, project-based engagements, hybrid arrangements — is making it easier for students with complex lives to participate without sacrificing income.

The government is also addressing this issue. The Commonwealth Prac Payment offers financial support to eligible students who are studying teaching, nursing, midwifery or social work (either Bachelor or Master level) which has increased to $338.60 per week. In addition, a paid practicum subsidy to support early childhood teachers (ECTs) and educators will offer a flat weekly rate of $1,246.50 for 5 days and will be available for those studying diploma, degree or postgraduate Early Childhood Education as of 28 April 2026.

NCVER research on vocational education consistently shows that students who complete industry placements have better employment outcomes and higher qualification completion rates. The business case for investing in access. The question is whether institutions are willing to have the harder conversation with industry partners about what fair remuneration actually looks like.

The long view

Unpaid internships are on borrowed time — economically, ethically, and politically. State and federal governments are paying increasing attention to the regulation of unpaid work, and community expectations are shifting. Institutions that get ahead of this now, by building paid, flexible, and accessible placement models, will be better positioned than those that wait for legislation to force the issue.

The cost-of-living crisis is painful. But if it finally ends the era of unpaid internships as standard practice in Australian higher education, that's a genuinely good outcome — for students, for institutions, and for the employers who benefit from a more diverse pipeline of graduates.