There are a number of key questions arising from this report.

WHAT WILL HAPPEN TO UK DEMAND?

Based on growth in undergraduate demand expected between 2002-03 and 2010-11 in England, Hepi has previously calculated that there could be up to 50,000 more postgraduate students by the end of the decade.

Recent press reports suggest that some universities are presuming that as graduate numbers rise, an increasing proportion will undertake postgraduate study as a means of distinguishing themselves from their peers. But this is far from certain. The proportion of UK first-degree graduates proceeding to postgraduate study as a first destination has declined. On the other hand, the number of UK full-time entrants to postgraduate programmes appears to be growing faster than the number receiving degrees.

This suggests an increase in the numbers opting for postgraduate study after gaining their first degrees. If this is the case, it may be some time before the full impact of growth in the undergraduate population is felt on the postgraduate population.

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It is too early to judge how increased levels of student debt and the new fee arrangements for undergraduate courses will affect demand for postgraduate study. But it could be significant, as a large proportion of postgraduates are self-funded, and prospects for growth depend on this number increasing.

It is also possible that new graduates - those graduating now who would not have become graduates in an earlier period - will not be as willing to proceed to further study as past graduates.

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WHAT WILL HAPPEN TO EU DEMAND?

EU students make up 8 per cent of all postgraduates in the UK - a proportion largely unchanged since 1995-96. Accession countries are expected to bring in an extra 5,000 to 9,000 EU postgraduate students by 2010. This group is not critical to UK universities in terms of revenue. EU students carry many of the costs of overseas students but do not pay premium fees.

For UK postgraduate providers, however, it will be important to watch moves towards the creation of a European ÖйúAƬ Area or the implementation of the Bologna Process. This is seeking to establish equivalence of qualifications awarded in different European countries and could be based on years of study, as is customary in many European countries, rather than on learning outcomes, as is customary in the UK.

If this process defines a two-year masters cycle as a European norm, it could have serious implications for UK universities, which have carved out a very successful market niche with one-year taught masters. But it is far from certain that this will happen, and the draft EU constitution rules out any move to require member states to offer a particular pattern of provision.

On the other hand, if, as a result of developments in the EU, the English masters degree develops a reputation as an inferior product, this could damage the UK's standing in the much more important world market.

WHAT WILL HAPPEN TO GLOBAL DEMAND?

Recent research by the British Council has sought to predict the future demand for UK ÖйúAƬ from outside the UK and to identify the factors influencing that demand. It estimates that demand will continue to rise steeply, particularly for taught postgraduate study.

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Across the major English-speaking destination countries, it predicts that growth will increase by an average of 6 per cent a year until 2020. For the UK, it predicts a growth rate of 4.7 per cent a year until 2020, based on current trends. It forecasts that the percentage of postgraduates among international students in the UK will increase from 47 per cent in 2003 to 57 per cent in 2020.

Overseas student demand can be volatile. There is already evidence that other English-speaking countries are experiencing a fall-off in demand. In October 2004, The Times Higher reported a sudden and unpredicted fall of 14 per cent in the number of people arriving in the UK on student visas in 2003. It is not yet known whether this phenomenon will be reflected in ÖйúAƬ enrolments for 2003-04.

WILL PROVISION MOVE OFFSHORE?

In addition to overseas students studying in the UK, large numbers receive their education through distance learning or through accredited or offshore programmes based in the student's country of origin. The potential market for this kind of education is greater even than the market for education delivered in the UK. The British Council has predicted that demand for this type of ÖйúAƬ will outstrip onshore provision for international students sometime between 2005 and 2010 (these projections take no account of limitations in capacity in UK institutions that could hasten this development). Such projections are speculative because there is a lack of credible data about offshore and distance learning exports.

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Offshore provision avoids some of the challenges - and opportunities - associated with the international university and can be delivered at a lower cost, in large part because the student's travel and maintenance costs will be far lower.

It does, however, pose formidable quality assurance problems. UK institutions have a collective interest in maintaining the currency of their courses and their qualifications, and this will require very active engagement with any collaborators in offshore provision.

Postgraduate education in the UK
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