Degrees on the menu: Meet the students signing up for free courses

For anyone graduating into a gloomy jobs market, saddled with debt, it is an enticing prospect: sign up for postgraduate study, postpone the need to get a job and it won't cost a thing. Certainly, when the University of Gloucestershire offered Clare Cubberley a free one-year taught Masters in international business law, which usually costs £3,995, she felt it was too good to miss. She hopes it will help her stand out when she later tries to get a job in the law. And there is another consideration: "I don't think you should turn down an opportunity when it's free."

Gloucestershire is unusual in offering to waive some tuition fees completely. But a number of other universities have introduced, or increased, fee discounts for postgraduates this year, saying they want to help students through harsh economic times.

Rama Thirunamachandran, deputy vice-chancellor at Keele University, which is offering £1,000 bursaries to all 2009 Keele graduates who opt to stay on for full-time postgraduate study, says: "We recognise that the 2009 cohort is going into a difficult economic climate. We felt it was right that if some of our students either didn't want to go into employment because of the difficult economic conditions or couldn't go into employment they should be offered the opportunity to carry on at Keele to enhance their skills." Around 90 students have benefited from the discount.

The University of Bradford is also keen to encourage its graduates to stay on for further study rather than face the particularly tricky job prospects in the region, says Sarah Verbickas, Bradford's fees, bursaries and scholarships officer. This year the university is offering £750 off its £4,060 taught full-time Masters courses, for anyone who graduated from Bradford as an undergraduate in the past two years, or who is a Bradford citizen. About 66 students have already received the discount and the university expects more than 100 to benefit this term.

"It's also about trying to increase postgraduate salaries in the area and increase skills," she says. "It's about the partnership we have with the city and the region, which is why we extended it to the city as well. It's giving people in the area opportunities they wouldn't have had."

David Dawson, head of business and management at Gloucestershire University, says the idea behind his university's scheme came from talking to the local business community. "We were looking at what we could do to alleviate the situation," he says. "What we hit upon as something we could do without damaging our own markets was to offer free places on particular Masters courses for people who had been unemployed for more than six months."

While the university offered up to 50 free places, only 10 have been taken up, and most of these are not local. Dawson says a big barrier has been the fact that, in taking up a place, students lose their Jobseeker's Allowance. As they still have to pay living costs, this makes even free postgraduate study unaffordable for some. The university is now considering ways of adding some kind of stipend to the scheme.

Howard Green, a senior partner in the consultancy Postgraduate Directions, says that the issue of how students meet their living costs is key, because high dropout rates are often linked to a lack of adequate funding. Universities which offer fee-only help could therefore be setting up problems for themselves and their students.

"I would want to be absolutely sure that the fees-only idea ensures that there is funding for the stipend side of it available somewhere," he says. "Otherwise universities will be paying for something that doesn't encourage successful completion."

There is both a moral issue about encouraging students to embark on something they may not ultimately be able to afford, he says, as well as a practical one as institutions are penalised for students who do not complete.

Green also warns that there are downsides in encouraging graduates to stay on at the same university as postgraduates: "If you look at it from a marketing perspective, you would say the obvious thing to do is keep your own postgraduates – you know them, they know you. A lot of academics, on the other hand, say that from an academic point of view they will tell students: 'Why don't you find out what somewhere else is like?'"

Marketing should be less of a consideration for many universities this year because the recession has caused a surge in applications. In a survey by the Higher Education Careers Services Unit published last month 81 per cent of careers advisers reported coming across students who were considering further study because they thought they would be unable to get a job.

But demand for postgraduate study varies enormously from institution to institution. And the marketing benefits of these discount schemes are not just confined to attracting postgraduates; they can help to attract high-quality undergraduates, too. James Forshaw, senior funding officer at John Moores University, which for the past two years has offered £500 bursaries to its graduates who progress on to postgraduate courses, says many of the best students are already thinking about further study when they apply for a first degree.

Dawson says he is particularly pleased with the quality of postgraduate students recruited through the no-tuition fee scheme as well. The university won't get any extra money for these students, however, which is why Dawson says the reason behind it is mainly altruistic.

There is no doubt that many postgraduates could do with some financial altruism. Unlike undergraduates, they have no access to government-supported loans or grants, unless they are studying teaching, social work or nursing. Research councils offer some support, particularly in science subjects, but their budgets are tight. And since the Government stopped funding courses for students who already have a qualification at or below the same level, many postgraduate fees have gone up.

Martin Stead, a mature student studying for a Masters in digital art and media at Bradford University after graduating from the university last year with a first in creative media technology, says it is unlikely he would have been able to consider further study without a discount. Not only does he get £750 off the fees as a Bradford alumni, he also gets a £500 bursary under another Bradford scheme to give financial support to postgraduates eligible for grants as undergraduates. In addition, he has an academic scholarship of £1,500.

Stead's original plan had been to get a job in the media industry after graduation, but he describes it as "a struggle, to say the least [and], all that financial help has helped me to decide that I'm better off here".

Cubberley is equally pleased with the deal from her university. Without it, she would have had to spend a few years working before she could afford a further degree, she says. As it is, she has made new friends and become surer than ever that her decision to go for a law career is the right one.

As for paying her living costs, she lives at home and relies on her parents, her waitressing job at a local fish restaurant and her overdraft.

Thirunamachandran believes that universities have an obligation to do their bit for the community in difficult times. "We are doing more than simply thinking about our graduates," he says. "We are thinking more widely about what a university can and should do at a time of recession."