Undergraduates who receive financial bursaries are more likely to stay in university, according to new research.

The report by researchers at the University of Plymouth and the University of the West of England claims that even modest help for students from poorer backgrounds can have a “significant positive effect”.

The study found that, as well as providing practical benefits, the money also helped reinforce a desire to study in students with no family history of attending university, the BBC reports.

The government plans to give bursaries greater weight under its planned reform of higher education funding in England.

From 2006, universities will be able to charge up to £3,000 a year for tuition, but to charge maximum fees, they will also have to cover the costs of the poorest students with bursaries of at least £300.

Researchers discovered that, less than two per cent of students were getting bursaries, either through lack of awareness of some deterrent such as the means testing.

According to the study, students receiving bursaries were more likely to continue with their studies – am average of 93 per cent, compared with 88 per cent.

Students with family incomes of £20,000 or less currently get their fees paid for them and about a third of the students at each university in the research qualified for this.

In addition to having fees covered, students from certain inner city or education action zone areas can also apply for “opportunity bursaries” worth a total of £2,000 over three years.

Andy Hannan from the University of Plymouth said: “It appears that bursaries, even those set at a modest level to cover some of the start-up costs of becoming a full-time student, can have a significant positive effect on student retention and progress.”