But Education Minister Christopher Pyne said safeguards would be needed to make sure their families weren't liable.
"(If) an elderly person passes away with a HECS debt, they wouldn't be able to say to the bank, `we're not paying back our mortgage', yet they are - at the moment - entitled to not pay back their HECS debt," Mr Pyne told Fairfax Media.
However, the minister also suggested there might be a need to set an age limit.
"This would ensure that families of people who died young owing a HECS debt would not be penalised," he said in the interview published on Thursday.
Grattan Institute higher education specialist Andrew Norton estimates collecting unpaid HECS-HELP debts from deceased estates could net the government $2.8 billion over the next three years.
Currently, any debts owed on the income-contingent loans are cancelled upon death.
Mr Norton has suggested debts only be recovered from estates worth more than $100,000.
It's now rare for people to die before paying off their student loans.
However, new modelling from Curtin University's National Centre for Student Equity in Higher Education says the government's plans to deregulate university fees and charge compound interest on student loans could mean students had debts for longer.
"Fewer students will be expected to pay off their debt in full in their lifetime," the report, released on Thursday, says.
A student who graduates with a $50,000 HECS-HELP debt would have to earn an average of $80,000 a year to pay off the loan before retirement.
This assumes they would be in full-time work with no breaks, regular wage growth and a final salary well above $80,000.
A student who earned an averages of less than $80,000 a year throughout their working life would still have a debt when they turned 70, the modelling shows.
