Scottish students pay no tuition fees at Scottish universities and European rules require the same policy to apply to students from other EU countries, but students from other parts of the UK are charged fees.
However, a legal loophole could see students escape fees by taking Republic of Ireland citizenship and applying as EU students, resulting in their fees being paid under European equality law.
Almost 625,000 people living in England and Wales claimed Irish ethnicity in the 2001 census and as many as six million across the UK are estimated to have at least one Irish grandparent.
The loophole could see hundreds of thousands of students awarded free places and could also benefit the children and grandchildren of other European nationalities.
There are fears it could increase competition for places across the UK and reduce income at some institutions.
Recently, it emerged students in Northern Ireland were being encouraged to apply for a Republic of Ireland passport to avoid the fees.
The Scottish Government said only a small number of people would be affected.
Edinburgh University charges students from the rest of the UK £36,000 for a degree.
Gordon Watson, president of the University and College Union Scotland, said: “Those with a dual-European passport will compete with Scottish students for the capped number of places in clearing and a huge rise in such applications is likely next year. This is another incidence that shows the introduction of fees for UK students outside of Scotland will play havoc with the admissions process as universities try to maximise student intake from those diminishing number of UK students who will pay fees.”
A spokeswoman for Universities Scotland said there was “no indication” that Scotland’s universities had seen a rise in applicants holding an Irish passport.
A Scottish Government spokesman said: “Students who hold dual-UK and EU nationality have been able to apply for fee support as non-UK EU nationals at Scottish universities for a number of years, but there is no evidence to suggest this has ever happened on a significant scale or that it is likely to.”