The students will work in pairs, some focusing on environmental solutions such as wetland planting, and others on town planning and economic development.
They will be exploring the town and talking to residents as part of the project.
While some of the ideas might be a "bit wacky" or "left field", hopefully others could be worth looking into, Mr Allan said.
"They sometimes identify things which are useful to explore further ... they've been given free rein to explore and interpret Masterton and its identity."
It was always useful to hear from people who were "looking at the world in a different way", he said.