Postgraduate loans in England

In the 2016-17 academic year, non-means tested loans of up to £10,000 were introduced for English-domiciled postgraduate students taking Master’s courses at higher education institutions in the UK.[1] Student starting courses in the 2019-20 academic year will be able to receive loans of up to £10,906. Non-means tested loans of up to £25,000 for doctoral students were also introduced from the 2018‑19 academic year. Students starting courses in 2019-20 can receive loans of up to £25,700. Postgraduate loans, encompassing both Master’s loans and Doctoral loans, are also referred to as Plan 3 loans.

This briefing provides information on the development of policy relating to postgraduate loans, including the rationale for their introduction, the consultation process and the eligibility criteria. It refers only to the English loans schemes.

Master’s loans

Following an initial announcement at the Autumn Statement 2014, in March 2015, the Coalition Government published a consultation on a proposed system of loans for postgraduate Master’s courses. In its response to the consultation, published in November 2015, the Government stated that loans of up to £10,000 for both taught masters courses and research-based masters would be available from 2016-17. Some minor changes have been made to the loans scheme since its introduction. Under the scheme as it stands for the 2019-20 academic year:

• Non-means tested loans of up to £10,906 are available to eligible students aged under 60 on eligible 1 or 2 year full-time masters courses. Students studying part-time at a minimum of 50% intensity of full-time study, or on part-time courses of up to three years with no full-time equivalent, are also able to access loans.
• Individuals who already have a postgraduate masters qualification or a higher level qualification are not eligible.
• Eligible courses include taught, research, distance learning or professional masters courses across all disciplines.
• Loans are available to eligible students studying at a publicly funded higher education institution in the UK or at alternative providers with degree awarding powers, and to students studying designated courses at an alternative provider. Students ordinarily resident in Scotland, Wales or Northern Ireland are not eligible.
• The interest on loans is RPI+3%.
• The repayment threshold is £21,000. The repayment rate is 6% and loans are repaid concurrently with undergraduate student loans.

In 2016-17 home and EU entrants to taught postgraduate courses were up by 22% among full-time students and 9% among part-time students. There was a further increase among full-time students in 2017-18. The funding council has attributed these increases to the introduction of loans.

The Complete University Guide’s annual survey of fees suggests that the average home fee for a taught postgraduate course increased by 8.3% between 2017-18 and 2018-19 from £6,848 to £7,415. It has been suggested that the availability of loans may have been a factor behind recent rises in fees.

In 2016-17 64,100 students from England or EU students in England took out postgraduate loans totalling £510 million, or an average of just under £8,000. In 2017-18 the number provisionally increased to 82,000 and the total to almost £620 million. Early data for 2018-19 (up to the end of October only) showed a further increase in students paid a Master’s loan to 69,800, around 3,000 higher than at the equivalent time in 2017-18.

Doctoral students

Following earlier announcements, Budget 2016 reaffirmed the Government’s intention to introduce loans for doctoral students and a technical consultation on the proposed scheme was launched in November 2016. The consultation closed in December 2016.

Budget 2017 confirmed that the Government would introduce doctoral loans from the 2018-19 academic year. The Government’s response to the consultation was published on the same day as the Budget. Under the scheme for the 2019-20 academic year:

• Non-means tested loans of up to £25,700 will be available to eligible students under the age of 60 as a contribution towards the costs of completing a doctoral qualification.
• Eligible students ordinarily resident in England will be able to take their loan to any UK university with research degree awarding powers. Individuals ordinarily resident in Scotland, Wales and Northern Ireland will not be eligible for loans.
• The repayment rate for the loans will be 6%. For students also with a Master’s loan, repayment will be taken through one single postgraduate loan repayment of 6%. Repayment will be made concurrently with repayment of any undergraduate student loans.
• The repayment threshold will be £21,000, which will be frozen until 2021.

The first data on doctoral loans for the 2018-19 academic year (up to October only), found that 1,800 students had been paid a loan. The average requested for the year was £6,500 and just over £24,000 for the entire duration of the course.