Australia could face a shortage of psychologists despite hundreds of students fighting to become qualified in the area.

The Australian Psychological Society says substantial course-delivery costs are preventing universities from offering places in the field.

Chief executive Lyn Littlefield said institutions were reporting funding shortfalls of between $8000 and $15,000 per student, prompting many to limit placements in the field.

''We're getting in the order of 200 students applying to get into professional masters programs when there's only 10 places available, and that is consistent across the country,'' she said.

''It's becoming a very, very competitive course but universities are telling us they can't open up more places because they are losing money for every student they take on.''

Professor Littlefield said the number of postgraduate places had dropped by 12per cent since 2004 after the Federal Government moved the subject to a lower cluster funding group under the Commonwealth Supported Places scheme.

In a pre-budget submission, she has called for the subject to be promoted back into a higher cluster to ensure its survival.

She said the subject was currently in a cluster 5 classification - the same band as arts and foreign languages - but deserved to be moved to the cluster 7 band alongside other science courses.

''Our students are now expected to know more about neural pathways and various neurotransmitters associated with psychological disorders, which means they need to do much more of the science-related subjects,'' she said.

''The course also requires intensive supervision out in the field and that can be quite costly. We think it is absolutely arguable and legitimate, therefore, that we are at least placed with the cluster 7 subjects.''

Professor Littlefield urged the Government to act promptly given the need for mental health services was higher than ever before.

Publicity campaigns had made Australians more comfortable in seeking help for conditions such as anxiety and depression.

There had also been a boom in demand after the Federal Government added psychology to the list of services covered by Medicare in 2006.