Under a bill introduced in June, the number of students from regional areas or low socio-economic backgrounds enrolling in university will be uncapped, making study more accessible.
The reforms would mean universities get more funding for the extra students they enrol from poorer backgrounds, as well as those who study at regional campuses under a needs-based model.
The Commonwealth will pay universities $1535 per eligible equity student and $1398 for every regional student to help cover tutoring, mentoring, and academic assistance.
Greens senator Mehreen Faruqi said the bill does not go far enough, instead calling for HECS-HELP debt to be abolished.
She said the changes were a weak response to university fee hikes in recent years, referring to Morrison-era humanities cost surges that the Labor government was yet to revoke.
"The Greens believe that all students should be able to study the course of their choosing for free, and we believe that undertaking higher education shouldn't send a student into poverty," Senator Faruqi said in a statement published in a Senate committee report on Thursday.
Her party has tried to introduce bills for the abolition of HECS several times since Labor came to power in 2022.
Education Minister Jason Clare told reporters in June that students from low socio-economic backgrounds and "from the bush" were less likely to complete university degrees than young adults from wealthy suburbs.
"Talent is everywhere. It's opportunity that's not. These reforms will mean more young people from poor families and from the regions and the bush get a crack at university," he said at the time.
While the committee largely supported the bill, it warned some students would miss out because of narrow definitions.
A student's socio-economic status is currently based on their residential address alone.
The committee's report outlined recommendations from universities that the definition of educational disadvantage be extended to consider income, education, employment, housing and disability.
This means students from some areas, like the ACT, miss out on help they would be eligible for if they lived in a poorer area.
"This is a product of good urban planning but statistically hides disadvantaged individuals," a submission from the University of Canberra highlighted in the report said.
The bill allowed ministerial overreach, committee members noted, including giving the minister the ability to set course caps for Indigenous and international students.
The laws will pave the way for $3.6 billion extra in funding for government-supported places at university over the next 10 years.
During the next decade, an extra 230,000 students will begin university study.
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