Associate Defence Minister Heather Roy says her proposal for voluntary national service has a lot of public support.
Mrs Roy is leading a companion study looking at the issue, alongside a Government review of the Defence Force.
She says a national service scheme would allow graduates to draw down their student debt, in return for length of stay and service given.
While New Zealand no longer has an appetite for compulsory military service, Mrs Roy says many people who were conscripted talk favourably about their experiences.
She says the terms of reference for her study are being finalised, and she will appoint a committee this week to develop a report on the issue.