The blanket federal bans, since applied also to many state programmes, followed concern at Pacific Islanders and Hong Kong Chinese migrating to Australia after gaining New Zealand citizenship.
Tertiary Education Minister Craig Emerson this week announced the new access to student loans in the Gold Coast city of Logan, where a summit of educators, welfare and community leaders had urged changes to enable expat Kiwis access to university and vocational training.
The summit warned that thousands of young Kiwis were being dumped on the scrapheap with no prospects after high school, and were turning to crime, drugs and gangs.
Last January, Pacific Island and Aboriginal youths battled each other in Logan.
Although the change applies to all expat New Zealanders, Mr Emerson's focus was largely on the region's big Pacific Islander community.
The Opposition's universities spokesman, Senator Brett Mason, would say only that the coalition would be "looking closely at the Government's proposal".