Higher tuition fees and lack of money are likely to put more UK graduates off continuing their studies, contributing to a shortage of highly skilled workers, a major report warns.
Universities are increasingly geared towards attracting international postgraduate students, who are likely to return home after completing their studies, it says.
The major study by the Higher Education Commission says that urgent reform of postgraduate education is needed to ensure the UK has the skills it needs for the future.
Postgraduate education is facing a “credit crisis”, with rising numbers of people prevented from studying due to lack of access to finance.
The report says: “We are concerned that an increasing number of people who wish to enter postgraduate education are prevented from doing so due to lack of access to finance.”
It argues that the government-supported professional and career development loan system is “uncompetitive and unattractive” and the number of loans granted has fallen.
“Fees for postgraduate taught courses are likely to increase – which will exacerbate this situation,” the report says.
“Many contributors to this inquiry were concerned about changes in attitudes to debt among those beginning undergraduate study this autumn under the new fees regime.
“Universities, employers and students repeatedly expressed concern that demand for postgraduate study will fall as students become more reluctant to add to their student debt.”
The impact of these factors could lead to a decline in UK postgraduates, which would have “long-term implications for British competitiveness and leave UK universities even more reliant on international students to maintain the viability of provision,” the report says.
It warns that would-be postgraduate students are facing a “perfect storm” of higher fees and a reluctance by banks to lend money.
The report says that recent increases in postgraduate students are almost entirely down to foreign students. Since 1999, the numbers of international students have risen by 200 per cent, while home and EU student numbers have only gone up by 18 per cent in the same period.
The Commission said it is concerned that this increase “masks stagnation in the qualification and skill level” of the UK’s population.
The study also notes that recent data published by the European Commission found that England and Wales, alongside Andorra and Kazakhstan, were the only countries in the European education area to have less than 10 per cent of their own, home undergraduates enter postgraduate study within two years.
“We need an emphasis on up-skilling the UK population, ensuring that British students are able to compete in the global labour market,” it says.