Free university degrees for budding nurses in Victoria could exacerbate nationwide aged care and private hospital workforce shortages and pit states against each other, peak bodies warn.

The Australian Private Hospitals Association (APHA) and Australian Primary Health Care Nurses Association (APHCNA) have panned Victoria's offer to pay off the entire HECS debt of more than 10,000 nursing and midwifery graduates.

All new domestic students enrolling in undergraduate nursing and midwifery courses in 2023 and 2024 will receive up to $16,500 under a $270 million package unveiled by the Andrews government on Sunday.

Students will receive $9000 over their three years of study, but the rest would only be paid off if they work in Victorian public health services for two years.

While being spruiked as a salve for Victoria's overburdened public hospitals, APHA chief executive Michael Roff said the move could force the closure of private sector services.

"That is not good news for the state's public hospital system," he said in a statement on Monday.

"Victoria's public hospitals are already groaning under the strain of COVID-19, influenza and massive elective surgery backlogs.

"They are currently relying on the private sector to help them manage all of this. If the private sector loses hospitals, the pressure on the public system only increases."

The policy would start a bidding war between states and territories for a workforce that wasn't there, Mr Roff said.

"If each state and territory follows Victoria's lead, we will not have a national strategy but eight different approaches competing with each other."

The peak body has called on federal Health Minister Mark Butler to intervene to implement a national health workforce strategy ahead of this week's jobs and skills summit.

In addition to aged care, the APHCNA believes the policy risks worsening nurse shortages in general practice and wants the Andrews government to tweak it.

"The intent of this announcement is to improve the health of Victorians," APHCNA chief executive Ken Griffin said.

"In its current form, it will fail to do this by undermining health settings such as aged care and general practice."

Victorian Health Minister Mary-Anne Thomas was noncommittal on adding incentives to encourage graduates to move into aged care, saying the public health system has borne the brunt of the COVID-19 pandemic.

"Our nursing graduates will make the decisions that are right for them," she told ABC Radio.

She has an ally in the Australian Nursing and Midwifery Federation, with Victorian branch secretary Lisa Fitzpatrick backing the package to "expand the pipeline of new nurses and midwives".

Addressing the National Press Club in Canberra, Prime Minister Anthony Albanese said he spoke with Victorian Premier Daniel Andrews about the program on Monday morning and welcomes it.

But he was cagey when asked if the federal government would consider waiving some or all of existing nurses' HECS debts to boost retention and address gender inequity in the female-dominated profession.

"I'm not about to make multi-billion dollar commitments on the run," Mr Albanese said.

The Victorian opposition has pledged to match state Labor's commitment if it wins the November state election, but Shadow Treasurer David Davis said the policy isn't without deficiencies.