Ms McDonald's success was announced at the 2019 Victorian Training Awards on Friday night at Crown Casino and she admits to feeling "a bit numb" about the experience.
"It hasn't really hit me yet; it has been surreal and I got a bit emotional," she said.
However, she said the state-wide success was a great honour which she hoped would encourage other Indigenous students to pursue their dreams.
"It means a lot to me; I hope it inspires others to take that step forward and use education to make a difference in their lives," she said.
Ms McDonald, who was the 2018 South West TAFE Koorie Student of the Year, will now compete for the national title in November, which includes a week of personal development and mentoring in Brisbane.
The mother of four said studying a Diploma of Community Services at South West TAFE helped turn her life around as she recovered from a family violence situation.
During the course, Ms McDonald worked as a paralegal at a local law firm, helping women through family violence issues, and since completing her study last year has worked at South West Healthcare developing and implementing a Reconciliation Action Plan to address the health needs of the Indigenous community and making the hospital more culturally safe and appropriate.
Ms McDonald said the Diploma of Community Services "completely changed my life".
"Before starting my course, I could have never imagined achieving something like this. It's ignited a passion in me," she said.
"The course set me on a new direction, helped me to overcome my self-doubt and gave me greater awareness of the diverse groups within our local community."
Ms McDonald, 41, praised her teachers at South West TAFE. "They have set me up for a career in the community services field. They were so understanding and flexible, allowing me to bring my children to class on some occasions and helping me to achieve my goals."