Opposition parties in the run-up to the Scottish parliamentary elections are now pledged to make abolition of fees a condition for any deal with Labour at Holyrood.
Donald Dewar said the cash will "break down the financial barriers" for disabled, unemployed and low income part-time students in higher education. Students previously looked after by their local authority away from home will also benefit. "The only challenges these students should face should be academic ones," the Secretary of State said.
The scheme includes waiving fees for low-income and unemployed part-time students on higher national diploma and certificate courses. HND and HNC students in further education will be in line for a similar deal. They are entitled to fee waivers at present, but at the college's discretion.