George Osborne has revealed the government will be backing loans of up to £10,000 for students studying postgraduate masters courses.
The announcement was made during his Autumn Statement in which he outlined the state of the economy and his fiscal plans ahead of next year.
Speaking in the House of Commons this afternoon, the chancellor said: “A year ago, I abolished the arbitrary cap on the total number of undergraduates at our universities.
“Today, I am going to revolutionise the support for our post-graduate students too. Until now there has been almost no financial support available, and the upfront costs of postgraduate degrees deter bright students from poorer backgrounds.
“So today, across all disciplines, we will make government-backed student loans of up to £10,000 available, for the first time ever, to all young people undertaking post-grad masters degrees."
But there are concerns the system may discriminate against mature students with the new loans said to be restricted to the under 30s.
The Times' education editor Greg Hurst tweeted as the chancellor made his announcement to reveal some details around the scheme, although these have yet to be confirmed.
Postgraduate loans will be restricted to people under 30 years old, Treasury documents show, though for taught master's in any subject— Greg Hurst (@GregHurstTimes) December 3, 2014
New postgraduate loans will be available from 2016— Greg Hurst (@GregHurstTimes) December 3, 2014
Govt estimates the new loan system will enable 10,000 more students to undertake postgraduate study each year— Greg Hurst (@GregHurstTimes) December 3, 2014
NUS hails postgrad loans saying 'will make fundamental difference to the lives of students'. Shouldn't @nusuk stand up for mature students?— Greg Hurst (@GregHurstTimes) December 3, 2014
Megan Dunn, the NUS vice president for higher education lauded the scheme as "a major step in the right direction".
She said: "Creating a government-backed postgraduate loans scheme will make a fundamental difference to the lives and opportunities of students. Many postgraduates are currently funding their study through potentially disastrous measures such as credit cards, overdrafts and personal loans.
"We are looking forward to inputting in to the upcoming consultation, so that this much needed postgraduate loans scheme can be introduced as a matter of urgency."
Meanwhile Nicola Dandridge, chief executive of Universities UK, said: “The introduction of a new postgraduate student loans system is good news. We support the government’s recognition of the substantial benefits arising from postgraduate taught education, and the need for support to ensure that some students are not priced out of further study.
“We welcome also the Chancellor's continued personal prioritisation of science and research. The UK produces some of the best research in the world and universities are central to this success. Publicly-funded science and research promotes regional growth and boosts the prosperity and growth potential of the economy.
"However, if the UK is to maintain its position as a premier global research power, it must commit to long-term government-financed investment. The UK is currently investing less in research and innovation than its major international competitors and the UK’s position is being challenged.”
But the scheme was criticised for not going far enough by Dr Tony Strike, the director of strategy, planning and change at the University of Sheffield.
He said: "My view is a state loan system is welcome as two thirds of those who say they are unlikely to take up postgraduate study say more financial support may help change their mind. However, on its own it won't help those from the least well-off backgrounds nor ensure fair access to the professions.
“The consortium’s research shows that graduates from the least well-off backgrounds are more likely than average to say they wish to go onto postgraduate study, but are discouraged by debt and a scholarship solution has been more effective in facilitating the realisation of their ambitions.
"Providing lending will help stimulate demand for postgraduate study but a nuanced approach is needed to this complex problem, one which ensures fair access and supports widening participation in a targeted way.
"We particularly welcome the announcement to support students until these loans are in place with £50 million in 2015-16 to offer bursaries on a match funded basis. These will be £10,000 each and will benefit 10,000 students. This should not however be seen as a stop gap or short term fix until lending is on place but as a necessary part of the long term solution.”