Tens of thousands of students graduating this year will have to join the dole queue, according to research that paints a grim picture for the class of 2009.

This year’s graduates — the first to pay full tuition fees — face a bleak job market with a 20 per cent reduction in graduate vacancies, said High Fliers Research, a market research company. It conducts a survey every year involving 16,000 final-year students — one in five of the total — at the top 30 universities.

Of the 160,000 graduates seeking work this summer up to half will not succeed, the company says. Its predictions come as other figures showed that graduate debt has almost reached £26 billion, compared with £18 billion in 2007.

Martin Birchall, the managing director of High Fliers, said that there was a shortfall of 80,000 vacancies for graduates this year. “There is a massive over-supply of students for the job market and as the Government moves closer and closer to its target of 50 per cent going to university, that is only going to be exacerbated.”

David Lammy, the Higher Education Minister, said that the Government had provided 5,000 internship placements through partnerships with big business for this year’s graduates. He added that he did not “recognise” the prediction that 80,000 students would be left without work. “Graduates haven’t got out of university yet, so let’s wait and see,” he told The Times.

University vice-chancellors renewed calls yesterday for the cap on tuition fees to be lifted — a move that would push student debt even higher. They said this was necessary for British universities to maintain their position in world rankings.

Paul Wellings, Vice-Chancellor of Lancaster University and chairman-elect of the 1994 Group of research-intensive universities, said that universities should be allowed to make different charges to drive up competition between them.

“The ones that think they can charge more should be able to do so,” he said. “Fees of £3,000 a year aren’t generating enough revenue or making a substantial difference to teaching and learning.”

Fees for students starting this year are capped at £3,225. Official figures published yesterday show that graduates now have £25.96 billion of debt with the Student Loans Company.

Almost three million students have debts with the company, which have to be repaid at an interest rate of 1.5 per cent once a graduate earns £15,000.

Stephen Williams, the Liberal Democrat universities spokesman, said: “Students leaving university this year will have built up mountains of debt just as they enter an extremely tough job market. It is alarming to see many universities now gearing up to push for fees to be raised later this year.”

A spokeswoman for the Department for Business, Innovation and Skills said: “The increased amount outstanding on student loans is to be expected as the system matures and more students go into higher education.”

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