New report produced by Centre Forum available to download

Employers increasingly desire postgraduate level skills – evidenced by the widening postgraduate/​first degree only’ wage gap – and so should everybody else, says think-tank 

New report produced by Centre Forum available to download 

The number of overseas students enrolling on postgraduate courses in Britain is huge. By contrast, worryingly few British graduates return to university to undertake further study. Funding for United Kingdom entrants is scarce and getting scarcer. And, because postgraduate course fees need to be paid up front, access is largely restricted to those in a position to self-fund.

While a few individuals receive financial support in the form of studentships, bursaries or fee waivers, the majority of British postgraduates receive no funding whatsoever to support their studies. There is no undergraduate style loan system to ensure fair access and only very limited funding available from government bodies, universities, employers and commercial lenders. This, together with rising course fees, has contributed to an overall decline in British postgraduate participation and a particularly sharp decline in first year part time enrolments — which have fallen by almost 30 per cent since 2010.

The scarcity of funding for UK postgraduates is not just bad for social mobility, it is also bad for the economy. It means that there are fewer highly skilled workers entering the labour market at the time of a skills shortage. Employers increasingly desire postgraduate level skills – evidenced by the widening postgraduate/​first degree only’ wage gap – and so should everybody else. No country has ever seen its growth rate fall because it has overeducated its population but there are plenty examples of countries that have suffered from having too few skilled workers.

The time to tackle the postgraduate funding problem is now. Our new report Postgraduate education: better funding and better access explores how we can go about it. While there is no single solution to the funding problem, we are particularly keen to see the introduction of an income contingent loans scheme for postgraduate taught courses – Mas and MScs or equivalent. This would ideally be financed through additional borrowing, given that government can borrow at 0 per cent real interest rates over a long period. But we accept that the government’s intention to bring down borrowing may lead it to look for alternatives. For that reason, a loans scheme could be piloted within the existing higher education budget before being rolled out in full.

We would like to see this scheme replace the public/​private Professional and Career Development Loan initiative, which the universities minister David Willetts has indicated he wants to see expand. Only a small handful of postgraduates secure one of these loans – less than 3 per cent of the total number of home students who enrolled on a postgraduate course in 2010. And the terms of repayment have been widely criticised. even urges borrowers to take out a private personal loan upon graduating in order to pay back their PCDL and save a considerable sum of money. This is nothing short of ludicrous.

In addition to extending income contingent loans to postgraduates, we urge universities to take steps towards expanding their endowment capacity and to access financial markets to enable students to draw loans. We also call for data to be collected to assess how far current funding arrangements are suppressing demand for postgraduate study, as well as a review of the rules, regulations and funding structure.

It is vital, for instance, that the government reviews its position on immigration rules that prohibit non-European Union students from entering the British workforce after finishing their studies. Policy that deters overseas students from enrolling at UK universities leaves institutions financially worse off and has a knock on effect on fees and course choice for home students. Without action, the UK will find itself outcompeted with a society that is increasingly stratified. It is time we afford British postgraduates the same funding opportunities available to those elsewhere in Europe and the rest of the world.

Tom Frostick co-edited the report Postgraduate education: better funding and better access, published by the British-based CentreForum think-tank