Is the postgrad bubble about to burst?

Debt-burdened graduates need a strong financial incentive to go on to advanced study

After years of inexorable increases in the numbers of students opting for postgraduate study, are we about to see a fall? Burdened with debt from their undergraduate years, or lured by decent salaries in the job market, are some of our brightest minds going to give advanced study a miss?

After years of inexorable increases in the numbers of students opting for postgraduate study, are we about to see a fall? Burdened with debt from their undergraduate years, or lured by decent salaries in the job market, are some of our brightest minds going to give advanced study a miss?

It's a hard call to make. If there was going to be a difference, it should have shown up in the intake this autumn, because the students graduating in the summer were the first to have gone through a complete university career with only loans for support. Many of them would have been graduating thousands of pounds in debt to the Student Loans Company. The prospect of living on only little more than fresh air for a few more years while they get stuck into advanced study may not have felt so appealing.

The figures are being collated and crunched now, but the final tally won't be available until next June. Jeremy Hoad, education policy officer for the National Postgraduate Committee, thinks it could go either one of two ways. "Students may be put off incurring more debt, but you could argue that they now have a culture of knowing they will be in debt. They know that this is how education works - you build up big debts; a bit longer building up a bit more debt may not worry them."

There has been a huge increase in the numbers of postgraduate students over the last 20 years. Currently, there are about 400,000 postgraduate students - 300,000 of them on courses like the one-year taught Masters, and about 100,000 doing research leading to PhDs and MPhils. This is quadruple the postgraduate figure in 1982 but does include significant numbers of self-funded overseas students.

The increase in percentage of people opting for postgraduate education has risen much faster than the numbers becoming under-graduates. In recent years, the annual percentage rise has been between 4 and 5 per cent, with the numbers opting for taught Masters rising fastest. The actual percentages are around a 3 per cent annual increase in PhD and MPhil students and about 6 per cent for taught Masters students.

The Office of Science and Technology has found evidence of some research places not being filled. It has also found out from a student survey that the cash on offer to research students is less likely to be worth getting out of bed for if you are a science- or engineering-based student, than it is if you are an arts student. Science and engineering students, in demand from industry, seem to know their own worth.

If there is a fall in numbers, how much does it matter? There are those who think there are too many postgraduate students now anyway, and a reduction in numbers would enable better financial packages to be paid, which in turn, should attract the better students.

Earlier this year, the UK Life Sciences Committee made up of senior academics and representatives of research charities, said that there were too many postgraduate life-sciences research students in the UK. The members argued that, if the numbers were cut, those who remained could be paid 35 per cent more - in an effort to compete with comparable salaries outside universities.

The idea came from a working party, which reported that something drastic had to be done if the research field was to compete with industry and its salaries. It said that attracting the best students to PhD training was essential for the future of bio-sciences in the UK.

It was particularly concerned that research councils at that time were offering postgraduate students a stipend of £6,620 a year, while students who entered the job market immediately after their first degree typically earned twice that after tax. With current university and public-sector salary levels, the report said that the average student would not clear a loan-company debt of £10,000 until 15 years after they graduated. This compared with an average of nine years for a student who became an accountant.

The report added: "We argue that if the UK is to attract the best life scientists into research then, for economic reasons, the system must respond to the alternative opportunities on offer across the graduate market." It went on to recommend that all research council-funded PhD students should receive a minimum stipend of £9,000. It accepted that the only way to afford this might be to cut the opportunities for research. "This may well decrease significantly the number of PhD students being supported by the research councils... a cultural change away from a policy of maximising the numbers of PhD students being trained regardless of the scientific needs of the nation," it concluded.

The recommendation was heeded. The research councils have now agreed to increase maintenance levels of studentships to around £9,000 or £9,500 over the next two or three years. The Engineering and Physical Sciences Research Council has gone even further. It is scrapping individual financial awards in favour of block grants to the university departments it is supporting. This will give individual departments the flexibility to take on fewer research students but pay them much more.

Universities are very aware of the need to get the financial packages right to attract the brightest students. Warwick University, for example, has recently announced a £1m Postgraduate Research Fellowship scheme. This will award at least 35 fellowships a year to PhD students, paying their academic fees in full and providing a maintenance allowance of £8,000 a year: which is £1,000 more than the rate offered currently by UK Research Councils to PhD students.

In return, Fellows undertake 110 hours of research, teaching or administrative work within their department for which they are trained. Mr Ken Sloan, from Warwick's Graduate School says: "We have woken up to the fact that our biggest competitors are not just other universities, but other graduate employers. If we do not improve the financial package we offer and provide a real career path, it will be increasingly difficult to persuade the best graduates to stay on and provide the next generation of researchers and teachers."