Why Rising Numbers Of Postgraduates Could Lead To A Massive Funding Shortfall In The UK
The number of postgraduate students enrolling in courses in the UK is on the rise. In the past five years, the number of student registrations has increased by more than 20% and is on track to surpass 650,000 in 2020/21[1]. So how is the rising of students affect the postgraduate funding market?
Postgraduate Students Registration Forecast
At present, it is estimated that 11% of the UK’s under-30 population will participate in postgraduate education[2]. This means that the number of 18-year-olds in the UK is expected to rise over the next decade. Registrations could hit 1 million by 2030.
Funding Shortfall
The increased cost of postgraduate study is the problem most students face. The cost is likely to outpace any value increase of the Postgraduate Master’s Loan (PML). Recipients of the PML in England currently receive up to £11,570. According to UCAS, the loan is marginally more than the average £11,000 postgraduate study cost.
But a report released in June 2021 by The Sutton Trust found that tuition fees are sharply increasing. For instance, average fees for Postgraduate Taught (PGT) courses at the UK’s most prestigious Golden Triangle universities rose as much as 158% between 2006/07 and 2020/21 [3]. Based on annual growth of 6% over the next nine years, Lendwise estimates the average cost of UK postgraduate study to be as high as £19,699 by 2030.
The value of the master’s loan is also likely to increase during this period. Based on a 3% annual growth rate, students would still face a £4,599 funding shortfall for average tuition fees. This shortfall is more noticeable when one considers a Master’s degree at a top-ranked UK university. UCAS estimates it can be up to four times the average cost.
Lendwise’s View
At Lendwise we are already seeing growing demand for private funding from postgraduates. Tuition fees for MBAs and other postgraduate courses can be significantly higher than the money students may receive in funding. In addition, they also have to pay for accommodation and meet rising living costs.
In the first nine months of 2021, the volume of loans with Lendwise surpassed the figure for the whole of 2020. This creates greater opportunities for our investors who are currently achieving estimated returns of 8% a year on average, with investments in individual loans going up to 10% a year.
The increased participation in postgraduate study in the UK should be celebrated and it will help to address the structural imbalance that exists within the UK’s labour market, more needs to be done to meet the growing funding requirement.
On one hand, the UK should celebrate the increased population in postgraduate study as it will help to address the social imbalance that exists in the UK labour market. But on the other hand, more needs to be done to meet the growing funding requirements.
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(Representative Example date: October 2024)
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[1] Lendwise analysis of Higher Education Student Statistics: UK, 2019-20
[2] Postgraduate Education in the UK, Higher Education Policy Institute (HEPI) analytical report 1, May 2020
[3] Inequality in the highest degree – Postgraduates, prices and participation, The Sutton Trust, June 2021
