The federal government should crack down on university graduates who take a ''free ride'' on the taxpayer by moving overseas after they have finished their studies, according to the peak universities body.
Collecting debts from graduates who move overseas would take the edge off budget measures such as fee deregulation and stop the cost of higher education blowing out, Universities Australia says.
Bruce Chapman, the architect of the HECS repayment scheme, backed calls for a comprehensive debt recovery scheme, estimating it could save the budget $80 million a year.
University graduates do not currently have to repay their loans while living overseas.
''There are big licks of cash that can be found - we don't believe it is as hard as has been made out. The United Kingdom does it and New Zealand does it,'' Universities Australia chief executive Belinda Robinson said.
It was ''unfair'' to charge students higher fees and increased interest on their debts while not asking overseas graduates to repay their debts. ''It's a free ride,'' she said. ''Recovering debts from overseas would make other changes more palatable.''
The Grattan Institute estimated that charging overseas debtors would bring in $177 million in extra revenue over two years.
Education Minister Christopher Pyne said he was negotiating a reciprocal arrangement to allow Australia to recover debts from citizens working in Britain. ''One of the purposes of the dialogue is to reach an agreement to shut the loophole that allows Australian graduates living in the UK to avoid repaying their HECS debt to the Australian taxpayer,'' he said.
About 23 per cent of graduates working overseas live in Britain, according to Graduate Careers Australia.
Professor Chapman, director of policy impact at the Australian National University's Crawford School, said bilateral debt recovery arrangements were ''too much trouble and too political''. It would be more effective to require all graduates who move abroad for more than six months to repay $2000 a year - the minimum repayment amount.
''You put the onus on the student so that if they don't repay they are breaking the law,'' he said.
Professor Chapman said education ministers had squibbed the issue since HECS was introduced. Given debts could double under a deregulated system, it was more important than ever to recover them, he said.
Earlier this year, Mr Pyne floated the idea of recovering debts from deceased estates, but the idea was ruled out by Prime Minister Tony Abbott.