Microsoft 365 Education Is Changing

On 5th November 2026, Microsoft announced a major update to its Microsoft 365 Education portfolio. It introduces new A0, A2 and A7 offers, changes the future role of A3 and A5, and sets out the retirement of Office 365 A1, Student Use Benefit and free Exchange Online for Alumni, all of which are used extensively in UK schools and MATs. 

The main portfolio changes apply at an organisation's first contract renewal, extension or new agreement on or after 1 January 2028. Existing licences and benefits remain in effect until the relevant renewal or extension. 

So, this isn't a reason to make rushed licensing decisions; it is a reason to make Microsoft 365 part of your technical, educational and financial planning during 2027. 

At Computeam, we think there is a much more useful question than 

"Which licences do we need, and what can we afford?"

It is:

What do we want our Microsoft environment to enable for pupils, staff and the organisation, and what will we need to license to make that possible?

Here are ten questions we would be asking if we were sitting around the leadership table.

 When does our current Microsoft agreement renew?

This should be the starting point because the transition is linked to your agreement. 

Office 365 A1 reaches end of sale through partner channels, including CSP and Volume Licensing, on 1st May 2027, before retiring from 1st January 2028. Organisations with qualifying existing agreements can continue under their current arrangements for the applicable term. Before discussing products, get the contract dates on the table.

 What licences are we actually using today?

Do you have Office 365 A1 users? Are pupils benefiting from Student Use Benefit? Which colleagues have A3 or A5? Are there inactive or historic accounts still sitting within the tenant? 

The Student Use Benefit programme will retire across Education purchasing programmes from 1st January 2028, subject to the transition arrangements applying to existing agreements. For Multi-Academy Trusts in particular, this is a good opportunity to establish an accurate picture across every school, because unutilised but free accounts are likely to come with a higher cost in future.

 What Microsoft services do our pupils really need?

The new no-cost Microsoft 365 Education A0 option might initially sound like the natural successor to A1, but it isn't a like-for-like replacement. 

For eligible institutions and students, A0 includes Microsoft 365 desktop and web apps, Minecraft Education, Microsoft Entra ID Free and Learning Zone. However, Exchange Online, SharePoint Online and Teams are not included. That turns licensing into an educational question. 

Do pupils need email? Do teachers routinely use Teams? Are SharePoint or Forms embedded in curriculum processes? Which age groups need which services? 

One of the more interesting opportunities is that institutions can mix and match eligible Microsoft 365 Education licences according to user need rather than necessarily placing every pupil and staff member on the same offer. 

The answer may be different for Year 2, Year 8 and Year 12, and the new portfolio gives institutions greater flexibility to mix appropriate licences across populations. The cheapest licence for everyone isn't necessarily the best answer. Neither is the most feature-rich licence for everyone.

 How much Microsoft 365 storage are we using?

At the first qualifying renewal or extension from 1st January 2028, Microsoft's existing 100 TB base tenant storage allocation will be removed. Storage will remain pooled at tenant level, but capacity will increasingly be determined by the paid student and faculty licences held.  

Under the announced model, A2 contributes 4 GB per paid student and 50 GB per faculty licence, A3 contributes 8 GB and 75 GB, and A5 and A7 contribute 12 GB and 150 GB respectively. Most schools and MATs will likely end up with a lower free or included data storage allowance as a result. 

Ask these key questions as leaders: Which accounts belong to pupils who left years ago? How long is student work retained? What should happen when a colleague leaves? Are old Teams, SharePoint sites and duplicated files being retained indefinitely? 

So don't wait until renewal to discover what is hiding in years of OneDrive, Exchange and SharePoint data. 2027 should be the year of digital housekeeping! This commercial change creates a useful trigger to review the whole lifecycle of users and data and to "muck out the stables", reducing potential cost and potentially reducing compliance risk around GDPR at the same time.

 What does our device strategy mean for A0?

Microsoft says the new no-cost A0 student offer will be available to eligible institutions with full paid faculty coverage on A2 or higher and to students who actively use devices running Windows for educational purposes. 

For schools running predominantly Windows devices, that seems straightforward. For Chromebook, iPad or mixed estates, it may require a wider conversation as further details emerge. Before building A0 into a financial forecast, we would recommend confirming eligibility against your actual device estate and agreement.

 Where do security and AI fit into the conversation?

The revised portfolio includes additional security and device-management capabilities for faculty, while the new A7 offering brings Microsoft's most advanced Education combination of AI, security, governance and device management capabilities. 

That doesn't automatically mean buying a higher licence; it does mean that when reviewing the options, leaders should consider security, identity, devices, safeguarding, AI governance and teaching and learning alongside price.

 What should we budget?

Microsoft has confirmed that pricing for its existing Microsoft 365 Education faculty suites with Teams will not change, although an individual institution's renewal price can still vary because of factors including current price level, the retirement of Student Use Benefit and Office 365 A1 and the mix of editions selected. 

A separate change comes sooner. From 1st May 2027, online services bought through Academic Volume Licensing move to a consistent price across Price Levels at the institution's first relevant renewal or extension. 

So, the sensible approach during 2027 is scenario planning:

  Establish staff and pupil numbers  

  Understand existing licence allocation  

  Check your renewal date  

  Calculate storage requirements  

  Map the applications different groups actually require  

  Model sensible licensing scenarios

  Request confirmed pricing against those scenarios 

 Who owns this decision?

Perhaps the most important question of all: a Microsoft 365 decision now reaches into finance, curriculum, cyber security, data governance, device strategy and AI. 

For a MAT, we would want the CFO or school business leadership, IT leadership and education leadership in the same conversation. Otherwise, a licensing decision made principally around cost may accidentally undermine the technology-enhanced learning strategy you have spent years developing.

 What is the timeline for change?

  1st December 2026
Microsoft 365 Education A2 becomes generally available. 

  1st May 2027
Office 365 A1 reaches end of sale through partner channels. The new consistent pricing approach for Academic Volume Licensing online services also begins applying at qualifying renewals or extensions. 

  1st January 2028
The updated portfolio transition takes effect at the first qualifying renewal, extension or new agreement. Office 365 A1, Student Use Benefit, and free Exchange Online for Alumni retire under the announced transition arrangements, and the new storage entitlements begin applying.  

We also know that Microsoft Classroom is joining the portfolio while Teams for Education remains available – follow us for updates on this one.

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 What are we waiting for?

Following this first announcement, there will be many more, which will refine and add detail to the new plans. In these early stages, housekeeping and fact-finding are the first steps before we can solidify what financial planning will look like. 

No school needs to redesign its Microsoft environment this week because of this announcement; but 2027 should be a planning year. At Computeam, we will continue to follow Microsoft's guidance as the position develops and keep our customers informed along the way. 

Our message to schools and trusts: prepare, don't panic, there is time.  

We recognise that these changes could have real financial implications for schools and trusts, at a time when budgets are already under considerable pressure. That's why our focus will be on preparing early rather than reacting late. Through client strategy meetings across 2027, we will work with customers to understand their renewal dates, current licensing, storage position, user needs and wider digital strategy, so that options can be considered with as much notice as possible. 

Alongside helping customers buy the right Microsoft licences, our aim is to guide them to make good choices about technology, security and education, and to make sure that when change does arrive, there are no unnecessary surprises.