The federal government has scrapped its plan for a lifetime cap on student loans, instead putting forward a renewable limit that could help loan changes win support in the Senate.
Legislation to lower the repayment threshold from $55,000 to $45,000 passed the lower house, where the government has a majority, on Tuesday afternoon.
Similar legislation seeking to lower the threshold to $42,000 made it past the same hurdle last year but was voted down in the Senate when it could not get crossbench support.
Nick Xenophon Team MP Rebekha Sharkie indicated on Monday that her party, a crucial Senate voting bloc, could be willing to support the latest threshold change if the government replaced the lifetime cap with a renewable limit.
The original plan would place a $150,000 borrowing cap on loans for students studying medicine, dentistry and veterinary science and $104,440 for other students.
Ms Andrews said Tuesday's amendments came from a Senate inquiry recommendation and would apply from January 1, 2020.
"It provides scope for individuals whose HELP-debt repayments for an income year have replenished their HELP-loan balance to re-borrow those funds," she said.
"This will enable them pursue further study, in order to retrain, change careers or further specialise in their current profession."
Labor is not supporting the legislation, but MP Terri Butler said they were not opposed to the replenishable limit which "improves a poor bill".
The current student loan repayment threshold requires people to start paying off four per cent of their pre-tax income once they earn just shy of $55,000.
These changes would start people paying one per cent of their pre-tax income once they earn $42,000 per year.
