Eleven universities are planning to launch a new postgraduate loan scheme. But postgraduates have dismissed the idea as a mere marketing ploy.

The universities, from the research-based 94 Group, are due to finalise terms with Midland Bank today for a scheme to offer lower-cost borrowing for full-time postgraduate students.

The universities of York, Warwick, Durham, East Anglia, Bath, Essex, Exeter, Reading, Surrey, Sussex and Birkbeck College London are involved, representing almost 30,000 postgraduate students.

"Public funding for postgraduates is not enough to meet the research needs of this country and it is not enough to meet the future academic staffing needs of our universities," said Essex vice chancellor Ivor Crewe, who led negotiations for the scheme.

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"Only a few postgraduates receive funding from Research Council studentships - most finance themselves."

The Government's Career Development Loan, which is the main alternative to Research Council studentships, was also criticised for failing to meet research needs and giving opportunities only to those in vocational, taught study.

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If agreed, the 94 Group scheme will offer students up to Pounds 10,000 towards fees and living expenses, with Pounds 5,000 for one-year courses. Interest will be at 2 per cent over Midland Bank's base rate with repayment periods of up to seven years.

Professor Crewe described the new loan arrangement as "a very positive move" towards encouraging postgraduate study.

But the National Postgraduate Committee, a student body representing postgraduates, was "not convinced".

"This proposal is more a marketing exercise by the bank than a serious attempt to solve the wider problem," said committee general secretary John Gray.

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He added: "People studying a one-year vocational course with a job waiting for them may find it useful, but costs for studying a three-year PhD could rise to mortgage proportions under this unsecured loan scheme. It is unlikely to encourage more people to do PhD's unless they're pretty confident they will get straight into a big money job."