Student numbers are expected to rise dramatically in Scotland following the abolition of up-front tuition fees and restoration of bursaries, economic analysts have predicted.
The London and Edinburgh-based company Business Strategies estimates the number of Scottish entrants will rise by 10,000 over the next decade, taking the current level of 23,000 a year to 33,000.
They say it could mean the Scottish Executive's assumed Pounds 33 million annual price tag for its new student finance deal is a significant underestimate.
Business Strategies predicts that by 2009, axing tuition fees will have attracted almost 3,000 of the 10,000 new entrants a year. Scots will have an added incentive to study in Scotland rather than elsewhere in the United Kingdom, while some who would not previously have gone into higher education will be encouraged to do so by the falling cost.
The company believes numbers are also likely to rise in line with the growing 16 to 24 population, boosted by changing social attitudes, public policy and the job market.
Business Strategies' managing economist Clare Reid said: "There is evidence that tuition fees and rising debt have put some young people off higher education. Abolition is now likely to lead to an increase in the proportion of young Scots who participate.
"The proposals, which have been approved by the Scottish Parliament, will ultimately cost a total of Pounds 33 million a year, according to government figures. But this could be more if student numbers continue to rise in line with our forecasts."
The Committee of Scottish Higher Education Principals said it welcomed any increase in qualified entrants. But it believed a key catalyst would be the Scottish Executive's new bursaries, rather than the abolition of fees.
A Coshep spokesman said: "Bursaries are very important in ensuring that people who were previously excluded for financial reasons are able to come into higher education. But we absolutely cannot continue to take in more students without an increase in funding."
The report calculates that Scottish students from low-income families will have about Pounds 450 of extra income each year, and could see their total student debt cut by up to Pounds 4,000 if they take up their full loan entitlement.
An increase in Scottish students suggests a higher supply of graduate labour, improving the skills base and leading to higher competitiveness and productivity, the report says. But graduate salaries might also drop, with Scots moving south in search of higher wages, or accepting non-graduate jobs.
In the longer term, students from poorer backgrounds are likely to be able to pay off their debts more quickly than at present.