Postgraduates face 'credit crisis'

Higher tuition fees and lack of money are likely to put more UK graduates off continuing their studies, contributing to a shortage of highly skilled workers, a major report warns.

Universities are increasingly geared towards attracting international postgraduate students, who are likely to return home after completing their studies, it says.

The major study by the Higher Education Commission says that urgent reform of postgraduate education is needed to ensure the UK has the skills it needs for the future.

Postgraduate education is facing a "credit crisis", with rising numbers of people prevented from studying due to lack of access to finance. The report raises concerns about lack of finance for students, saying "there is a credit crisis in postgraduate education."

"We are concerned that an increasing number of people who wish to enter postgraduate education are prevented from doing so due to lack of access to finance," it adds.

It argues that the government-supported professional and career development loan system is "uncompetitive and unattractive" and the number of loans granted has fallen. The report says: "Fees for postgraduate taught courses are likely to increase - which will exacerbate this situation."

The impact of these factors could lead to a decline in UK postgraduates, which would have "long-term implications for British competitiveness and leave UK universities even more reliant on international students to maintain the viability of provision," the report says.

It warns that would-be postgraduate students are facing a "perfect storm" of higher fees and a reluctance by banks to lend money. At the same time, postgraduate degrees are becoming increasingly important.

A Department for Business, Innovation and Skills spokeswoman said: "We recognise that there are some concerns in the sector about postgraduate provision. We have asked the Higher Education Funding Council for England to monitor and review participation in postgraduate study as part of a longer term assessment of the impact of the funding changes."

Sir Peter Lampl, chairman of the Sutton Trust, said: "We must make the most of all our talents, and that is no less important in postgraduate studies which are now dominated by overseas students. The commission's proposal for a targeted, state-backed loan scheme should be pursued alongside other measures to support non-privileged postgraduate students. It is vital that our brightest graduates are not priced out of postgraduate study."