Australians living overseas will no longer be able to escape paying back their student loans after parliament ticked off new rules to close a repayment loophole.
The Senate on Monday passed legislation to collect HELP loan repayments from Australians living abroad, after the 16-year-old loophole allowed them to escape the obligation.
The government says the bill will ensure the sustainability of Australia's "world class" student loan scheme while also instilling fairness into the system.
It would apply to 46,000 people and save the budget $150 million over 10 years.
Education Minister Simon Birmingham said the bill would strengthen Australia's higher education system and reduce the burden on other taxpayers.
"It is critical that we ensure the sustainability of these HELP programs," he told parliament on Monday.
"You should have to repay that debt if you are meeting the terms of repayment."
From January 2016, Australians who move overseas for longer than six months would have to notify the tax office but won't have to start paying back the loans until July 2017.
Loan repayments wouldn't be collected if an expat didn't earn above the same threshold that applies in Australia.
Labor backed the legislation, with higher education spokesman Kim Carr saying continuing the loophole would validate the tax avoider.
"People have a right to be curious as to why we haven't acted on this earlier," he said.
Senator Birmingham said Australian taxpayers were out of pocket because the government carried the student debt at the long-term bond rate while loans were only indexed by CPI.
The Australian Greens opposed the legislation after failing to amend it to prevent it applying retrospectively, and to exempt foreign residents and people living their first year overseas.
Greens senator Robert Simms said expat Australians weren't tax avoiders but ordinary residents living overseas who could have trouble finding out about the changes.
