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Page last updated at 13:09 GMT, Saturday, 27 September 2008 14:09 UK

Call for new postgraduate funding

By Bob Howard
BBC Radio 4's Money Box

Money Box listener Julia
Julia will pay 12.9% interest on her career development loan

Postgraduate students should be funded by the same student loans system which funds undergraduate studies, says the National Union of Students.

Government backed loans from the Student Loans Company are only available to undergraduates.

Postgraduate students have limited funding options, including grants or career development loans.

The government says its priority is funding undergraduates and current postgraduate funding is sufficient.

Julia Ross from Wiltshire is about to begin an MA in broadcast journalism at London City University.

The government, if it claims that postgraduate study is important ... needs to ensure a fairer funding system to support students.
Aaron Porter, National Union of Students

She chose to borrow £8,000 through a government backed career development loan from the Co-operative bank, one of three banks which offers them. To be eligible the course must be recognized by the Learning and Skills Council.

While Julia is studying she does not make any repayments and the government pays the interest on the loan. When she finishes, the bank starts charging her interest at 12.9% and she has to start repaying almost immediately.

Undergratuate loans

In contrast, undergraduate loans from the government backed Student Loans Company currently accrue interest of 3.8% and graduates pay nothing until their salary reaches £15 000, when they pay back 9% of anything earned above that. Julia says that's a big difference:

"It's a pretty daunting prospect to think that essentially what I'm getting is a bank loan, I just don't have to pay any interest for the first year."

Some of those who are accepted for career development loans are still in debt from their undergraduate courses

This concerns many parents like Sue from Yorkshire.

The priority for government funding and the tax payer is to get you your first degree.
Bill Rammel, Minister for Higher Education

Her daughter Rachel is finishing a fine arts MA and has a career development loan for £8,000 from Barclays, on top of the £12 000 she still owes for her degree course.

Sue is worried about how students like her daughter will be able to afford the repayments: "You have students applying for these who may not have applied for a loan before. They pay interest at 12.9%. I think it would be far better if the government extends the student loan scheme."

Support needed

Aaron Porter, vice president for higher education at the National Union of Students, also believes a more comprehensive system of funding is needed.

"The government, if it claims that postgraduate study is important, and it does, needs to ensure a fairer funding system to support students. I think a student loan system would be a better mechanism to ensure that happens."

The government however says it has no plans to introduce such a system and that adequate funding is already available.

Bill Rammel, the Minister for Higher Education, says postgraduate students can't expect the same support currently given to undergraduates:

"The priority for government funding and the tax payer is to get you your first degree. Beyond that, there¿s a greater onus on the individual to actually support what they're doing."

There are seven government-funded research councils offering a variety of grants which can pay post graduate study fees in full . In 2006/7 they were given £371 million to award.

The Arts and Humanities Council funds around one in five students who apply to it, around 1000 students this year.

BBC Radio 4's Money Box was broadcast on Saturday,
27 September 2008 at 1204 BST.

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