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

It's estimated that recovering HECS debt from graduates who move overseas could save the budget $80 million a year. Credit:Andrew Quilty

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