The 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 controversial budget measures such as fee deregulation and stop the cost of higher education blowing out, Universities Australia says.

"There are big licks of cash that can be found": Belinda Robinson, Universities Australia. Credit:Bohdan Warchomij

Bruce Chapman, the architect of the HECS repayment scheme, backed calls for a 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.