Further details of a ¡°workable and affordable¡± model for a state-backed postgraduate loan scheme have been unveiled as leading sector figures suggest that the government could be about to back similar support for such students.

With the chancellor George Osborne known to be preparing an announcement on postgraduate funding in his Autumn Statement, the Institute for Public Policy Research has released modelling on a popular proposal for a loan scheme.

The centre-left thinktank says that a loan of ?10,000 could be provided to taught postgraduate students at a subsidy cost of ?44 million a year, according to its report, titled Reaching Higher: Reforming Student Loans to Broaden Access to Postgraduate Study.

That is less than the ?50 million scheduled to be announced in postgraduate support on 3 December ¨C money left over from the recasting of the undergraduate National Scholarship Programme ¨C with Treasury insiders hinting that it may take the form of a loan scheme, rather than simply bursaries.

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Under the IPPR¡¯s model, which stems from an idea first put forward by economist Tim Leunig, now a policy adviser at the Department for Education, and later by the National Union of Students, postgraduates would repay 9 per cent of their income between ?15,000 and ?21,000 over 30 years. The thinktank says that the proposal is ¡°eminently affordable¡±, with the Treasury writing off just 6.9 per cent of loans (?230 per person on average).

That is far lower than the 40 to 45 per cent of undergraduate loans currently being written off, which amounts to a loan subsidy of ?4.2 billion, the IPPR says.

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The scheme would also require direct financial support for postgraduate courses to total ?103 million a year; current recurrent spending on taught postgraduate courses totals about ?130 million.

It would also add just over ?1 billion to the national debt in the short term, the IPPR says.

¡°Given that 93 per cent of this money will be recouped in graduate repayments, we believe this is an investment worth making,¡± says Rick Muir, the report¡¯s author.

Several universities are already testing small-scale loan schemes funded by a ?25 million pilot scheme provided by the Higher Education Funding Council for England.

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Madeleine Atkins, its chief executive, has said that she is ¡°hopeful¡± that Mr Osborne will announce further postgraduate support in his speech in December, while Greg Clark, the universities minister, has also hinted at a major announcement at that point.

But Professor Atkins said that she expected details of postgraduate funding to be released no later than December because ¡°universities need to get out and market that scheme to make sure they have students coming through¡±.

¡°If we are going to have a [postgraduate] scheme in 2015-16, we really need to get on with it,¡± she told Times Higher Education.

Nick Hillman, director of the Higher Education Policy Institute, said Mr Osborne may be considering ¡°something big¡± on postgraduate funding, particularly if it supported the sciences, social mobility and economic growth.

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¡°Every time someone has gone to him with a serious higher education problem, such as protecting research funding or uncapping student numbers, he has responded very positively,¡± said Mr Hillman.

¡°However, we have not yet worked out how he will pay for last year¡¯s big policy [lifting the cap on student numbers], so it would need to be an almost zero charge scheme,¡± he added.

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jack.grove@tesglobal.com