Almost half of Scottish students will benefit from a new support package, according to Wendy Alexander, Scotland's minister for enterprise and lifelong learning.
The Scottish Executive is set to introduce means-tested bursaries of up to £2,000 next year. Ms Alexander said thousands of low and middle-income families would now be taken out of the means test altogether or would have reduced contributions.
There is a 12 per cent increase in parents' allowable earnings, from £17,805 this year to £20,000 in 2001-02, while students' spouses' allowable earnings will rise from £15,070 to £17,000.
Tuition fees have been axed for Scottish students going to Scottish institutions. But Ms Alexander said she would be examining proposals for extra support for Scots studying elsewhere in the United Kingdom from 2002-03. "From next year, raising the income threshold for the means test will exempt more of these students from paying means-tested fees to their host institution," she said.
A mature students' bursary fund is being set up and student parents with low incomes will be entitled to a new school meals grant of up to £265 per child.
Mandy Telford, president of National Union of Students Scotland, said: "We are pleased with the progress we are making with the Scottish Executive, particularly around mature students and students with families. We will continue to lobby ministers."
There is an ongoing battle to increase the Scottish Executive's proposed £10,000 earnings threshold for contributions to the graduate endowment.
Andrew Cubie, convener of the independent inquiry that proposed a £25,000 earnings threshold, told the parliament's enterprise and lifelong learning committee that the lower threshold smacked of a "graduate tax".
The higher threshold, well above average earnings, meant graduates who benefited financially from their higher education were helping to support those coming into the system.
Mr Cubie said the committee's 52 unanimous recommendations were intended to be seen as a cohesive whole to ensure fair treatment.
"We're rather wedded to our package. If you take bits out, they may dislodge the rest of the wall," he said.