The number of English applicants to Scottish universities has slumped by nearly 15% in a year, new figures show.
The Ucas statistics also revealed a 6% increase in demand from Scots students and a 20% rise in EU students.
The fall raises further doubts that the Scottish government can plug a funding gap by charging substantial fees to students from the rest of UK.
The government said the figures did not give a full picture as some students do not apply through Ucas.
A spokesman said: "The final, and more complete, picture will not be known for some time yet.
"We will be working closely with the Scottish Funding Council, Ucas and the sector to monitor demand."
Scottish students studying at home currently pay no tuition fees, while other UK students currently at Scottish universities pay £1,820 per year for mainstream courses.
The Scottish government aims to implement changes to this system in 2012, in line with reforms in England which could see tuition fees go up to £9,000 a year.
It has published a Green Paper, laying out six possible options for funding;
- The state retaining primary responsibility for funding
- The state retaining primary responsibility for funding, but with a form of graduate contribution
- Increasing income from students coming to Scotland from other parts of the UK
- Increasing donations and "philanthropic giving"
- Increasing investment from Scottish businesses in higher education
- Making more efficiency savings in the sector
University principals in Scotland have already suggested income from other UK students would be unlikely to generate enough money to allow them to keep up with better funded institutions in England and beyond.
This argument is given credence by the drop in students from England - 26,000 in 2011, compared to more than 30,000 in 2010 - and a 7.5% reduction in Welsh students in the same period.
However, applicants from Northern Ireland rose by more than 8% to 6,000, and demand from EU and non-EU students also increased at the same time.
European law means the Scottish government is obliged to pay the fees of students living in non-UK EU countries.