More regional students will qualify for Youth Allowance, with parents allowed to earn $10,000 more before the payment is affected.
Legislation cleared parliament on Thursday to increase the maximum amount families can earn to $160,000 from $150,000, plus $10 000 for each additional child in the family.
"These important changes will enable 2300 more students from regional and remote Australia to qualify for Youth Allowance or receive a higher rate of payment," Social Services Minister Paul Fletcher said.
Education Minister Dan Tehan said young people in regional areas face extra challenges in accessing tertiary education.
"Accommodation and transport costs are a major issue for families with children who have to move away from home to study, and one that hits the hip pocket," Mr Tehan said.
"By removing such barriers to education we are ensuring they have a bright future ahead of them."
