One of the UK's biggest banks has put forward to ministers a proposal for a postgraduate student loans system based on a "risk-share" scheme with universities, Times Higher Education has learned.
The scheme, which has been suggested by Barclays, would aim to counter the gap in public funding for taught postgraduates, a situation previously described in a government report as a barrier to social mobility.
However, the details being put forward indicate that lending may depend on the "earnings track record" of graduates, potentially limiting it to certain students, according to one critic.
To the dismay of many in the sector, the lack of a funding system for postgraduates - who are not eligible for the publicly subsidised loans offered to undergraduates - was not addressed in either the Browne Review or last year's higher education White Paper.
The Higher Education Funding Council for England has been asked by the government to "examine the effect of the HE reforms on the postgraduate sector, both taught and research".
In the meantime, Hefce has announced an interim system of funding for subsidising taught postgraduate study - but the future of that funding is not certain.
David Willetts, the universities and science minister, said last week in response to a written parliamentary question that officials from the Department for Business, Innovation and Skills "held discussions with Barclays Bank in February 2012 about postgraduate finance".
Chris Hearn, head of education at Barclays Corporate, told THE that the bank had been speaking to BIS and universities about how to help the first cohort of graduates to leave university under the higher undergraduate fee regime in 2015.
"What is their appetite going to be to then go into postgraduate study, especially taught postgraduate study?" he said.
Mr Hearn said Barclays was looking at ways of developing its existing professional and career development loans, available for those undertaking further vocational study, to help taught postgraduates.
"One of the other alternatives is that instead of a risk-share with BIS, perhaps a bank lends to students on a risk-share with universities," he said.
Asked about the details of such a scheme, Mr Hearn said: "The cost of [loan] facilities reflects the risk. If we've got graduates who don't have an earnings track record, or a strong earnings track record, it is going to be difficult to find the right price to lend into that client group if they go into postgraduate study."
He added that the sector did need to "consider different models" because "it may be difficult to justify adding postgraduate finance" on top of the existing public subsidy for undergraduates.
However, Tim Leunig, chief economist at the thinktank CentreForum, who last year called for a government-run postgraduate finance scheme, said a bank-based system could lead to wealthier students becoming more favoured by universities and banks because they would be judged to be most likely to meet repayments.
"If you want a socially equitable outcome, a bank is not the obvious place to go. That is what governments are for," said Dr Leunig, a reader in economic history at the London School of Economics.
The Treasury is "very unkeen on a publicly financed scheme", he added. But Dr Leunig said the government was able to borrow at zero per cent real interest rates at present, making such a scheme affordable.
A Universities UK spokesman said it would be "broadly supportive" of exploring funding solutions for postgraduate students "particularly in relation" to career development loans and also accepted that any long-term solutions would need to consider "the distribution of risk".
In July 2009, a Cabinet Office report from the Panel on Fair Access to the Professions, headed by former Labour Cabinet minister Alan Milburn, noted that postgraduate degrees "have increasingly become an important route into many professional careers".
But there is "no student support framework equivalent to the framework for undergraduates" available for the courses, which are often expensive, it added.
"If fair access is to be possible, this issue will need to be addressed."