Microsoft 365 Education Is Changing: What It Means for Schools and Colleges

On 5 November, Microsoft announced a big update to Microsoft 365 Education. There’s a new set of plans, a free option for students, a new way of working out storage, and a few older offers on their way out. Microsoft says the aim is to give schools and universities more choice and flexibility.

Firstly, it’s worth noting that nothing changes today. Your current agreement, pricing and licences carry on until the agreement ends. The new setup starts at your first renewal, extension or new agreement on or after 1 January 2028 (pricing is the one exception, and that starts a bit sooner, on 1 May 2027).

We’ve been through Microsoft’s announcement and its FAQ and put it all in plain English. The two pages don’t agree on everything (we’ve called out the differences further down), and with such a fresh announcement the details may still change, so get in touch with Outlaw for the latest updates. Microsoft calls teachers and lecturers “faculty”, but we’ll just say staff.

The Short Version

• There are five plans, A0, A2, A3, A5 and A7, each with a staff and a student edition (with or without Teams), and A0 is free for students
• Staff on A3 and A5 get extra security and device tools at no extra cost
• The flat 100 TB storage allowance goes, and storage now grows with the number of paid licences
• Microsoft Classroom is new, and Teams for Education stays
• Office 365 A1, the Student Use Benefit and the free Exchange Online for Alumni offer all retire on 1 January 2028
• Online services pricing becomes the same across all price levels from 1 May 2027
• You can’t renew early to avoid the changes

When Does This Affect You?

Current agreements and pricing stay in place until the end of the current term. That includes multi-year agreements, even if 1 January 2028 lands in the middle of one.

The new plans, storage rules and retirements apply at your first renewal, extension or new agreement on or after 1 January 2028. The new pricing applies at your first renewal or extension on or after 1 May 2027, even if that’s before 2028.

Microsoft says early renewals, early commitments or anything else aimed at avoiding the changes are neither encouraged nor permitted.

The dates to know:

• 1 October 2026: A7 is available
• 5 November 2026: Microsoft announces the changes
• 1 December 2026: A2 is available, with new staff and paid student editions
• 1 May 2027: the new pricing starts at renewal, and Office 365 A1 stops being sold through partners
• 1 January 2028: A0, A3 and A5 become available, the retirements happen, and the new lineup and storage rules apply at each customer’s first renewal on or after this date

The New Plans

The five plans build on each other, so each one includes what the one before it has.

• A0 (free for students): Covers the basics, with Office apps (desktop and web), Minecraft Education, free sign-in security and Learning Zone (which needs a Copilot+ PC). Notably, it doesn’t include email, SharePoint or Teams. To qualify, your staff need to be fully covered on a paid A2 or higher, and your students need to actively use Windows devices for learning. You can get up to 20 A0 student licences for each eligible paid staff licence.
• A2: Adds Microsoft Classroom, Copilot Chat, Power Platform tools, stronger sign-in security, School Data Sync, mobile device management, standard auditing and email protection. It’s the plan that includes email, SharePoint and Teams (Teams is optional).
• A3: Adds Windows 11 Education, Intune for Education and better security and device management. Students see no difference. Staff also get Microsoft Defender for Office 365 Plan 1 (protection for email and collaboration tools).
• A5: Adds advanced identity, security, compliance, management and analytics. Students see no difference. Staff keep everything A5 has today and also get Microsoft Intune Suite (advanced device management).
• A7: Microsoft’s most advanced plan, for schools and universities that want to use AI across teaching, learning and running the organisation, with security and control kept in place. It builds on A5 and adds Microsoft 365 Copilot, Microsoft Agent 365, Microsoft Entra Suite and Intune Suite, plus advanced security, data protection and governance.

You can mix and match. You could put staff on one plan and students on another, or leave Teams out for some groups, and you only need to license the people who need a particular plan. Eligibility rules apply.

What About Your Existing Staff Plans?

List prices for existing staff suites won’t change. Your actual renewal price might, depending on your price level, your purchasing programme, your mix of licences, and the retirements below.

The extra security and device tools for A3 and A5 staff are included at no extra cost. But they come with the new setup. Customers renewing before 1 January 2028 keep the current portfolio at the current price (including Student Use Benefit and Office 365 A1 where they apply). Microsoft says it can’t add big new tools like Intune Suite to the existing model without changing the model, so you get them when you move to the new one.

Microsoft Classroom

Microsoft Classroom is a new home for teaching and learning, and it comes with A2 through A7. It can be set up for primary, secondary or higher education, and it works whether you use Teams, another collaboration platform or a learning management system.

It includes Assignments, Gradebook, Classwork, Learning Accelerators and Class Notebook, plus a Teach module for educators and a Study and Learn Agent for students. It doesn’t replace Teams, and you can carry on using Teams Assignments and the other Teams education tools.

AI: Copilot Chat, Copilot and Agents

Paid A2, A3, A5 and A7 plans (staff and student) include Copilot Chat. It’s secure AI chat that people use by signing in with their school or college account. Eligible students aged 13 and over can use it, subject to the age, licensing and admin controls you set. You’ll need to switch it on for students before they can use things like the Study and Learn Agent.

Microsoft uses a few similar names here, so here’s how they differ:

• Copilot Chat: AI chat for eligible users with their institutional account
• Microsoft 365 Copilot: brings AI into Microsoft 365 itself, using the information a person is allowed to see to help them work, teach, learn and research
• Microsoft Agent 365: the control panel for AI agents, giving you visibility over them and a way to manage and secure them, whatever platform they were built on
• A7: puts Copilot and Agent 365 together with the advanced security and management tools

AI agents are tools that handle multi-step jobs using approved data and apps. Depending on how they’re set up, they can look things up, coordinate work, suggest next steps or carry out approved actions. Microsoft’s advice is to get identity, data access, security, oversight and human-review controls in place before using them widely.

Some organisations may be eligible for special pricing on Microsoft 365 Copilot. Microsoft has to validate that first, and prices are only confirmed in a final, signed quote.

Storage

Your school’s Microsoft 365 storage is one shared pool. Today it starts with a flat 100 TB base allowance. At your first renewal or extension on or after 1 January 2028 that base goes, and the pool is built from your paid licences instead, including paid student licences for the first time. Until you renew, you stay on your current storage model.

Each paid licence adds this to the pool:

• A2: 4 GB per student and 50 GB per staff licence
• A3: 8 GB per student and 75 GB per staff licence
• A5 and A7: 12 GB per student and 150 GB per staff licence
• A0: nothing (those students use your existing pool)

Some staff add-ons and non-Education licences add extra storage too, and the published offer terms list which ones.

If the pool won’t be big enough, you can move to a plan with more storage, buy storage packs (they come in 10 TB blocks), use less, or archive old content with Microsoft 365 Archive. Microsoft suggests comparing your current usage, user numbers and licence mix against the storage you’d get at renewal, and starting well before it.

What’s Retiring

All of these retire on 1 January 2028:

• Office 365 A1: Stops being sold direct online on 5 November 2026 (per Microsoft’s FAQ) and through partners, including CSP and Volume Licensing, on 1 May 2027. Agreements that started before the cut-off carry on for their term, but A1 can’t be renewed, extended or added to afterwards. Microsoft’s two pages give different cut-off dates for this (see where they disagree below), so check which applies to you.
• Student Use Benefit: Same pattern. Licences carry on through the current term, then can’t be renewed or expanded. Students who still need access move to a paid student licence.
• Exchange Online for Alumni (the free offer): Free licences can’t be renewed. To keep alumni email going, move to the new paid Exchange Online for Alumni offer, available from 1 January 2028 through CSP and EES.

Anyone who needs to carry on after A1 moves to an eligible Microsoft 365 Education student or staff plan at renewal.

Pricing

From your first renewal or extension on or after 1 May 2027, all online services bought through Academic Volume Licensing get one consistent price across every price level. Existing agreement pricing stays until the end of the current term.

Microsoft also says A2 through A5 are priced at more than 80% off commercial pricing, and A7 at up to 60% off.

Where Microsoft’s Pages Disagree

Microsoft has published two pages on these changes (the portfolio page and the FAQ), and they don’t match on a couple of points:

• Office 365 A1 cut-off: The FAQ says agreements that began before 1 May 2027 can carry on using A1 for their term. The portfolio page says before 1 January 2028.
• When A1 stops being sold: The FAQ says direct web sales stop on 5 November 2026 and partner sales (including CSP and Volume Licensing) stop on 1 May 2027. The portfolio page only gives the 1 May 2027 partner date.

This is a fresh announcement, so Microsoft may well tidy these up or change details as more gets published. If any of this affects your renewal, get in touch with Outlaw for the latest updates.

Getting Ready for Renewal

1. Review your staff, student, alumni, Office 365 A1 and Student Use Benefit licences, and note who’ll need a replacement at renewal
2. Work out how the new per-licence storage will affect your pool, and plan for any gap
3. Decide what you want from AI, and check the eligibility, whole-organisation coverage requirements and licensing conditions in Microsoft’s Product Terms
4. Get your renewal date, licence numbers, expected user counts and storage usage together
5. Talk to your Microsoft account team or partner about pricing and licensing before your first renewal on or after 1 May 2027

Want a Hand Making Sense of It?

Microsoft’s pages don’t fully agree yet, and the details may change as more is published. If you’d like help working out what this means for your school or college, or you want the latest updates, get in touch with Outlaw and we’ll go through it with you.

Call 0115 6777 238 or email ayup@outlaw-it.co.uk.

Sources: Microsoft 365 Education portfolio evolution and Microsoft 365 Education frequently asked questions, both from Microsoft Learn.