People made unemployed by the recession should be allowed to enrol on part-time degree courses for free, says a think tank representing new universities.
Million+ says fees paid by part-time students are "a barrier they should not have to face".
It is urging the government to provide the funding to enable fees to be waived for those on job seekers allowance or short-time working.
The government said it was spending £4.7bn on developing the workforce.
Million+, which represents new universities across the UK, says allowing some people to enrol on higher education courses for free would cost the government £400m, but would bring in revenue of £523m.
Unemployed people who go on to gain a degree could stand to gain in excess of £95,000 over their working lives, the think-tank estimates.
It says Jobcentre Plus should provide the scheme as part of a range of options available to those affected by the recession.
Prospects
Part-time higher education students must currently pay fees up-front, whereas full-time students re-pay them after graduating.
This is because part-timers were excluded from the system of loans and grants created by the 2004 Higher Education Act.
Around 40% of students are studying part time, the vast majority of whom are over 21.
Some have their fees paid by their employers, and institutions may waive fees at their discretion.
But there are no regulations concerning how much institutions can charge for part-time courses.
Million+ says its scheme would support government objectives regarding investment to meet the economy's future needs, and would encourage older students to apply.
Pam Tatlow, Chief Executive of Million+, said: "If the UK is to avoid a cycle of long-term unemployment, the government will have to look beyond short training courses if it is to improve the re-employment prospects of those with lower qualifications."
This week, the jobless total in the UK passed two million for the first time since 1997, and the jobless rate jumped to 6.5% in January.
Jobseekers' allowance varies according to age, but a single person over the age of 25 would be entitled to a maximum of £60.50 per week.
A spokesperson for England's Department for Innovation, Universities and Skills said the government was providing extra money which would create a further 75,000 training places in colleges, and 35,000 apprenticeships over the next year.
"We know that the route to long-term recovery is investing in the development of our workforce which is why the government is spending £4.7bn on adult skills this year and has put in place a substantial package of additional training."
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