Loans worth £9,000 a year should be made available to all Scottish-domiciled taught postgraduate students, a government review has recommended.

A working group chaired by Bryan MacGregor, vice-principal of the University of Aberdeen, says that some or all of this debt could be written off if students stay in Scotland to work and pay tax after their courses finishes.

The “clear and universal entitlement” to postgraduate loans that recommends would represent a significant shift for Scotland, where finance has been largely restricted to Scottish and European Union students working towards diplomas that are included on a prescribed course list, not master’s programmes. The Holyrood government is also funding 850 postgraduate places as part of a four-year initiative.

The report says that, in the past decade, the number of Scottish-domiciled students enrolling on taught postgraduate courses fell by 2,230, or 10 per cent, although all but 250 of these were related to teaching-related courses.

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In addition, the Westminster government has announced plans for loans of £10,000 a year for English-domiciled students.

The working group recommends that Scottish loans should be valued at £9,000, reflecting the average taught postgraduate fee north of the border of £4,594, and the amount of living cost support that is currently available for diploma students, £4,500.

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The loans should be made available for Scottish students studying anywhere in the UK, reflecting the English position, and could be partially funded by reducing the number of government-funded places, the report says.

The report adds that the Scottish government should consider introducing the “incentive system” which would see students having some or all of their student debt cancelled if they stayed in the country after graduation, since this would “offset by [the] wider economic benefits of high-earning taxpayers living and working in Scotland”.

Angela Constance, the Scottish education secretary, said she would “carefully consider” the report, adding that she recognised “the importance of increased participation in postgraduate study by Scottish students”.

Vonnie Sandlan, the president of the National Union of Students in Scotland, said that improving financial support was “a vital step in making postgraduate study fairer”.

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But she argued that the introduction of loans should be accompanied by fee regulation, because without this “we run the risk of seeing tuition fee inflation, with universities simply pushing prices up…in response to the increased support available”.

chris.havergal@tesglobal.com