A student loan system for postgraduate master's degrees has been announced in the chancellor's Autumn Statement.
George Osborne said it would "revolutionise" access to postgraduate university courses.
He said the cost of postgraduate courses "deters bright students from poorer backgrounds".
The National Union of Students' vice president, Megan Dunn, described the move as a "major step in the right direction".
"Creating a government-backed postgraduate loans scheme will make a fundamental difference to the lives and opportunities of students.
"Many postgraduates are currently funding their study through potentially disastrous measures such as credit cards, overdrafts and personal loans," said Ms Dunn.
The government-backed loans, worth up to £10,000, will be available from 2016-17 and will benefit 40,000 students. The proposals expect to bring an extra 10,000 students into postgraduate study.
Loans will be offered in any master's subject, but only to students under the age of 30, and will be repaid concurrently with undergraduate loans.
There will be a consultation ahead of the final loan details, but they could be charged at a higher rate than undergraduate loans, while remaining below commercial rates.
"In recognition of the high private return to individuals," the Treasury says the loans will be designed so that, on average, they will be repaid in full.
The introduction of postgraduate loans is part of the drive for a higher-skilled workforce.
There is rising demand for staff with postgraduate qualifications, but there have been concerns that without financial support talented students might not stay beyond their undergraduate courses.
Nicola Dandridge, chief executive of Universities UK, said the loans announcement was "good news".
"We support the government's recognition of the substantial benefits arising from postgraduate taught education, and the need for support to ensure that some students are not priced out of further study."
The UCU lecturers' union said it was a step in the right direction, but "more radical ideas were needed".
'It's positive that the government has moved to address the current crisis in postgraduate funding, but encouraging people to accrue more debt is not the best way to attract the best and brightest into further study," said UCU leader Sally Hunt.
"If we really want to expand the number of UK postgraduates, government must consider even more radical ideas such as restoring proper grants or writing off part of a student's undergraduate debt when they complete a postgraduate course."
Nick Hillman, director of the Higher Education Policy Institute, said: "The new postgraduate loans deserve two-and-a-half cheers, which is as good as it gets in austere times.
"It will open up postgrad study to more people. The age limit will be frustrating to those who miss out and people will doubtless lobby against it. But it is a preferable starting point to many alternatives, like restricting the loans to certain subjects.
"It's intriguing that the extra postgraduates are predicted to number only 10,000 and we don't know how tough the repayment terms will be."
Don Nutbeam, vice chancellor of Southampton University said: "For many professions, a postgraduate degree is essential. Without affordable access to postgraduate education, many professions were simply out of reach of those who could not afford to pay."
Michael Gunn, chair of the Million+ group of universities, said that the announcement would help to reverse a decline in postgraduate study.
But he opposed the age limit, calling for the loans to be "extended to all who want to study for postgraduate qualifications".
Sir David Eastwood, chair of the Russell Group, said: "The benefits of studying high quality postgraduate programmes to students and to the economy are significant and growing, and the availability of loans will enable qualified students to take advantage of postgraduate study across the full range of academic and professional programmes."
Universities minister Greg Clark said: "By introducing postgraduate loans, students will have greater flexibility to gain the qualifications they need to get on in life and give the UK the skilled workforce we need to secure long-term economic growth."
The Autumn Statement also included funding for science research centres.
He announced £235m for the Sir Henry Royce Institute for advanced material science in Manchester, with branches in Leeds, Liverpool and Sheffield.
There will be £20m for an innovation centre on ageing in Newcastle and £113m for big data at Hartree.
The spending plans also announced £20m to improve careers services for young people and £10m extra to support academy chains in the north of England.