More students are doing postgraduate courses - but the money for them remains tight, writes Blake Evans Pritchard

With so many people in Britain now going to university, holding a bachelor degree carries less weight than it used to. This has led to many students staying on at university, to gain further qualifications that will set them apart from everyone else. But the rise in postgraduate numbers has not been as large as expected, and this has a lot to do with money.

According to a poll carried out last year for Unite - which provides university accommodation for students - the average student debt at the end of an undergraduate course is expected to be just under £9,000. Top-up fees of £3,000 will lead to an even greater burden of debt, says Ivor Crewe, the president of Universities UK, who nevertheless supports the government's proposal as necessary for funding universities. Unsurprisingly, many students are reluctant to borrow even more money for a postgraduate course, and keen to pay back what they already owe.

The most common way to fund postgraduate study is through government grants, which are administered by six research councils and the Arts and Humanities Research Board (which will become a council next year). But such grants cannot usually compete with what industry is prepared to offer recent graduates, and the temptation to leave the academic world is strong.

The subject being studied is also a consideration. It is usually necessary for chemists to have carried out some degree of postgraduate research if they are to be competitive in the job marketplace while students with an engineering degree often find that they can walk into a well-paid job without pursuing additional study.

Professor David Phillips, professor of chemistry at Imperial College in London, believes that, over the next few years, a growing number of students will decide to stay on at universities. "We have a much bigger volume of undergraduates coming through who have aspirations raised that the right step for them to go on to afterwards is to do research," he says.

This has a lot to do with the fact that it is no longer unusual to have a first degree. Half a century ago, under 10 per cent of those that left school ended up going to university. Now, 43.5 per cent of all 18 to 33-year-olds have or are studying for a first degree, and the government wants to see this figure increased to 50 per cent by 2010.

Also, the size of the awards that the government is prepared to offer research postgraduates has steadily increased over the past few years. In 1999, most research students were expected to live on just £6,000. By 2005, this will have doubled to a tax-free allowance of £12,000, which can be thought of as equivalent to a taxable starting salary in industry of roughly £18,500.

Phillips believes that a £12,000 grant is sufficient for most students. "Let's not forget that it is a kind of apprenticeship," he says. "They are going through an educational process as well. They're not just pairs of research hands - they are actually learning at the same time, and they come out with something which is very valuable."

Increasing the size of grants should make it easier to attract postgraduate research students, but Phillips does not necessarily think this is a good thing. He argues that many students who are encouraged to do doctoral and post-doctoral courses should actually not be admitted. "PhDs sound very glamorous and certainly, if you're very successful, it's a stepping stone towards all sorts of things," says Phillips, "but actually it is a very tough life." He adds that what the government should be aiming for is, quality over quantity.

University research is certainly becoming a more attractive prospect for graduates, but there is still the problem of how to keep research students on a more long-term basis. Phil Sooben, associate director of corporate strategy at the Economic and Social Research Council, points out that someone with a doctorate or post-doctorate qualification is highly sought after by industry, and industry can still afford to pay much higher salaries than the typical university research department.