The structural changes in Polyvinyl alcohol-borax hydrogels doped with carbonyl iron have been investigated, as a function of dopant and cross-linker concentrations, using Small Angle Neutron Scattering. For the undoped hydrogels and the ferrogels with 40 mg/ml magnetic particle concentrations, correlation length values show a consistent decrease with increase in borax concentration. In ferrogels with relatively lower (20 mg/ml) magnetic particle concentrations, the increase in borax concentration leads to an initial increase in correlation length followed by a decrease. The difference in behaviour is explained on the basis of concentration-dependent variations in sedimentation and coagulation of the magnetic particles which affect the shielding effect exerted by the free Na⁺ ions in the solvent.