Professor Les Ebdon, the director of fair access, is urging universities to provide financial aid to graduates from low-income families while they undertake unpaid internships.
The proposed scheme could help social mobility, allowing less privileged graduates to compete in the jobs market by completing the unpaid internships that are often necessary routes into careers.
Deputy PM Nick Clegg and Alan Milburn, the government adviser on social mobility, have criticised unpaid graduate internships for erecting barriers to social mobility.
They believe that graduates from higher income families have a significant advantage in getting into professions such as law, finance and the media.
Ebdon has recommended the notion in his latest advice to universities on ways to make the benefits of higher education fairer for all.
We recently weighed in on the internship debate, asking: are unpaid internships legal?