Microsoft 365 Education licensing is changing: What does this mean for your school or Trust?

Microsoft has announced some of the most significant changes to its education licensing portfolio in recent years, bringing new considerations and opportunities for how schools and Multi-Academy Trusts access, manage and invest in Microsoft technology.

For many of you, Microsoft 365 is already an important part of everyday school life. From Outlook and Teams to SharePoint, OneDrive and increasingly AI-powered tools, these services support teaching, learning and administration.

Changes to licensing naturally raise questions, particularly when you’re balancing budgets, security requirements and the needs of different users.

The good news is that most of these changes are being introduced gradually, giving you time to understand your options and plan ahead.

What’s changing with Microsoft 365 Education?

Microsoft’s revised education licensing portfolio introduces several important changes that will be phased in over the coming years.

The retirement of Office 365 A1 and Student Use Benefits

The existing free Office 365 A1 offering and Student Use Benefit programme are being phased out.

For many schools, these have been an important way to extend Microsoft services to pupils without purchasing individual paid licences.

Microsoft is introducing alternative student licensing options, including a new A0 offering for eligible students using Windows devices, alongside paid options from A2 upwards.

However, these alternatives won’t necessarily provide exactly the same services as your current arrangements. It’s worth reviewing which Microsoft tools your pupils use today and how those needs could be met under the new licensing options.

New licensing options, including Microsoft 365 A7

Microsoft is expanding its portfolio with new licensing tiers, including Microsoft 365 Education A7.

A7 brings together advanced security, identity management and AI capabilities, including Microsoft 365 Copilot and additional tools for managing AI agents.

There are also enhancements to existing A3 and A5 faculty licences, providing additional security and device-management capabilities.

For schools and Trusts exploring AI, cyber security and more effective device management, these developments could create useful opportunities. The important consideration is which capabilities will genuinely support your people, strengthen your systems and deliver value.

What could this mean for your school’s budget?

For school business managers and Trust finance teams, understanding the potential financial impact will understandably be a priority.

The effect will vary depending on your existing Microsoft environment. A small primary school with relatively straightforward requirements may have different considerations from a large secondary school or MAT managing a centralised environment across multiple sites.

Some of the key factors to review include:

• Your existing Microsoft agreements and renewal dates.
• The number of staff and pupils requiring licences.
• Your current reliance on free student entitlements.
• Device types and the services pupils need to access.
• Existing security, AI and device-management subscriptions.
• Current and projected cloud storage requirements.

Importantly, most of the major changes are not immediate.

Microsoft has indicated that the retirement of A1 and Student Use Benefits will generally take effect at the first contract renewal or extension on or after 1 January 2028, with certain pricing changes beginning earlier in 2027.

This gives you time to review your arrangements, understand the options available and factor any potential changes into future budgets.

An opportunity to review your wider digital strategy

While understanding the costs is important, I think this announcement also creates a valuable opportunity to look more broadly at how Microsoft technology supports your school or Trust.

Through our work with schools, we regularly see how licensing decisions connect to wider priorities, from improving staff collaboration and reducing workload to strengthening cyber security and making better use of existing systems.

Are you making full use of the licences you’re already paying for? Could overlapping subscriptions be consolidated? Are your security capabilities configured appropriately? And do you have the right foundations in place to introduce AI safely and effectively?

It’s also worth considering the different needs across your organisation. A classroom teacher may require very different tools from a finance director, safeguarding lead or pupil.

Taking a more considered approach can help you find the right balance between functionality, security, affordability and educational value.

Ultimately, the aim is to make sure your Microsoft investment continues to support your school’s priorities and the people who rely on it every day.

Four practical steps to help you prepare

You don’t need to make immediate changes to your licensing arrangements, but there are some useful steps you can take now.

1. Understand your current licensing position. Establish which Microsoft licences are purchased, assigned and actively used, including staff and student entitlements.
2. Check your renewal dates. Understand when the changes are likely to affect your organisation and how this aligns with future budget cycles.
3. Reassess your security and AI requirements. Consider whether the revised portfolio creates opportunities to improve protection, simplify licensing or support your digital transformation plans.
4. Model the financial implications. Compare the available options and their potential costs before committing to a renewal or changing your licensing arrangements.

For MATs in particular, there may be opportunities to take a more strategic approach across the entire Trust, bringing greater consistency to licensing decisions while recognising the needs of individual schools.

Helping you plan confidently for what’s next

At TLG TurnITon, we understand that technology decisions affect much more than the systems you use. They influence budgets, safeguarding, staff workload and the everyday experience of teaching and learning.

As these changes are introduced, we’ll be working alongside our customers to review existing licensing arrangements, understand future requirements and explore the options available through Microsoft’s revised portfolio.

That includes assessing security and storage arrangements, identifying potential commercial or operational risks and helping you make informed decisions ahead of renewal.

Microsoft’s announcement represents a significant shift in education licensing, but it also provides an opportunity to review your technology investment, strengthen your digital foundations and make sure you’re getting the right value from your Microsoft services.

If you’d like to understand how these changes could affect your school or Trust, get in touch with the TurnITon team.

We’re here to help you understand your options, make informed decisions and prepare for what’s ahead.