A review will be carried out into how Scottish colleges and universities will be funded after the coronavirus pandemic.
The Scottish Funding Council (SFC), which provides money to further and higher education institutions, said universities face operating deficits of between £383m and £651m in the next academic year.
Colleges have also experienced a significant loss of income and increased costs.
The SFC will look into how teaching and research can be provided in future, reporting back to ministers in August.
Higher education minister Richard Lochhead said: “Our colleges and universities are showing tremendous adaptability and ingenuity in meeting the challenges of Covid-19.
“Yet we know the financial impact could run to hundreds of millions of pounds in lost income.
“Further and higher education and the research sector must emerge from this crisis even stronger by being at the heart of our economic recovery, delivering on our skills needs and maintaining its world leading reputation.
“I am clear we will need to shift to meet those challenges so the SFC will look at how its existing models of funding, governance and delivery can exploit new opportunities and continue to support our world class further and higher education systems.”
SFC chairman Mike Cantlay said: “Covid-19 has created significant challenges for learners, colleges and universities.
“More broadly, the current crisis will create long-term changes in the Scottish economy and the way we live our lives.
“We will be considering what this means for the way we fund and support tertiary education and research to continue to deliver the outcomes we need for Scotland and beyond.”