SNP ministers must abandon free tuition and ask Scottish graduates to make a financial contribution, a think tank has said after the coronavirus crisis left universities in "dire" trouble.
Reform Scotland said graduates should pay back a proportion of their tuition fee once they start earning the average Scottish salary.
It also recommended that ministers stop funding free tuition for EU students, saying it was "bizarre" to subsidise youngsters from a union (EU) we have left while charging those from a union (UK) in which we remain."
The call came after the Telegraph disclosed earlier this month that Scottish universities have demanded that SNP ministers urgently find £130 million to fully fund their free tuition policy during the pandemic.
An anticipated collapse in international student numbers, whose large tuition fees have been used to subsidise free tuition for Scottish and EU undergraduates, could leave the sector facing a £435 million deficit by 2020/21. This is the equivalent of 70 per cent of the Scottish Funding Council’s annual teaching grant.
While universities have long been calling on the Scottish Government to close the gap between what it costs to teach a Scottish student and the public funding they receive, senior figures in higher education believe the current predicament means the disparity is no longer tenable.
In a stark submission to a Holyrood inquiry, Universities Scotland, warned of the “dire” situation facing the higher education sector and claimed that the fall-out from the pandemic “will be an existential threat to some institutions."
Scottish and EU students currently pay nothing but their places are capped to ensure the free tuition policy is affordable. More than 14,000 Scottish applicants missed out on a place last year.
However, youngsters from the rest of the UK must pay £9,250 per year and those from outside the EU up to £49,000, but there is no cap on their places.
Between 2014/15 and 2017/18, the number of non EU students at Scottish universities increased by 13 per cent and their fee income by 31 per cent to £599 million.
Nearly a third (32 per cent) of first degree students at St Andrews are from outside the EU and 20 per cent at Edinburgh.
The Reform Scotland report the majority of Scotland's universities were already struggling financially before the pandemic and the anticipated collapse in non-EU fees exposes the "weak position" of the ancient institutions.
Chris Deerin, the think tank's director, said; "We would all like to live in a world where 'free' university education works for the universities, the students and the taxpayer. But it's time to admit that it doesn't.
"Demand on the public purse is high and only going to rise - our politicians should have the courage and the foresight to challenge some old shibboleths in order to prepare Scotland for the challenges ahead.
"There needs to be a better balance between the individual graduate and taxpayers in contributing towards higher education." He added: "To fail to redress the balance would be an act of national self-harm."
He said this would be "fair" because graduates on average earn more money in their careers. Those who do not achieve the average Scottish salary would not have pay back their tuition, under the think tank's plan.
The Scottish Government has announced that EU students who start their degrees in the next academic year will continue to pay no tuition fees for the duration of their courses.
However, the Reform Scotland paper, titled "A Degree Of Fairness", said this support should end from the 2021/22 year.
Recent @uni_scot analysis indicates that 18 of Scotland's 19 universities are set to report financial deficits in 2020/21.— Chris Elmore MP (@CPJElmore) May 20, 2020
The UK and Scottish Governments must work closely together to guarantee the financial sustainability of the higher education sector.#ScotlandQuestions🏴 pic.twitter.com/VUQZNSRT9t
A Universities Scotland spokesman said: "The pandemic has caused a financial challenge in Scotland's universities on a scale not seen before. That problem is going to be most acute next academic year and it will need a financial intervention to get universities, and the students and staff who depend on them, through this crisis.
"Talk of fees or graduate contributions for Scots are an unhelpful distraction from the immediacy of the financial challenge at hand because no alternative funding model, involving a new contribution from students or graduates could be introduced for the next 18 months at a minimum, and so would not deliver a penny of funding when universities need it most.”
A Scottish Government spokesman said: "We remain committed to free higher education for Scots domiciled students and access to university being based on the ability to learn, not the ability to pay.
“We fully realise the detriment that losing international students from our education system will have in 2020-21 and beyond. We are working in partnership with universities and colleges to address the challenges and announced on 6 May an additional £75 million for research."