Microsoft Is Retiring Office 365 A1 and Removing 100 TB of Free Storage for Schools

Microsoft has announced major changes to Microsoft 365 Education, including the retirement of Office 365 A1, Student Use Benefit licenses, and free Exchange Online for Alumni. The company will also remove the 100TB base cloud storage allocation and introduce new education plans.

Most changes will take effect when institutions renew or extend their contracts on or after January 1, 2028.

Microsoft is retiring Office 365 A1 and other education offers

According to Microsoft’s announcement, Office 365 A1 sales ended through the web direct channel on November 5, 2026. Sales through CSP and Volume Licensing will end on May 1, 2027, followed by the plan’s final retirement on January 1, 2028.

Existing customers with eligible enrollments starting before May 1, 2027, can continue using their licenses until their enrollment terms end. However, they cannot renew or extend those licenses after retirement.

Microsoft will also retire Student Use Benefit licenses, free Exchange Online for Alumni, Open Value Subscription for Education Solutions (OVS-ES), and School 3 on January 1, 2028.

The company plans to introduce a paid Exchange Online for Alumni option on the same date.

New A0 and A7 plans bring free student access and more AI features

Microsoft is introducing a new education lineup consisting of A0, A2, A3, A5, and A7, with separate licensing options for students and faculty.

The new A0 plan offers eligible students Office desktop and web applications, Minecraft Education, Microsoft Entra ID Free, and Learning Zone experiences at no additional cost.

However, institutions must maintain full paid faculty coverage under Microsoft 365 Education A2 or higher, and eligible students must actively use Windows devices for education.

A0 also excludes Exchange Online, SharePoint Online, and Teams.

At the other end of the lineup, A7 builds on A5 with Microsoft 365 Copilot, Microsoft Agent 365, Microsoft Entra Suite, and additional security and management capabilities.

Microsoft is removing the 100TB base cloud storage allocation

Starting with the first contract renewal or extension on or after January 1, 2028, institutions will no longer receive the existing 100TB base storage allocation.

Instead, Microsoft will calculate available storage based on license types and quantities.

Student A2 licenses will contribute 4GB each, A3 licenses 8GB, and A5 or A7 licenses 12GB. Faculty licenses will contribute 50GB for A2, 75GB for A3, and 150GB for A5 or A7.

A0 licenses will contribute no additional storage, meaning those students will consume capacity from the institution’s shared storage pool.

Schools that need additional capacity can purchase storage in 10TB increments, upgrade their licenses, reduce existing storage usage, or move inactive content to Microsoft 365 Archive.

New education pricing starts May 1, 2027

Microsoft will also introduce consistent online service pricing across all Academic Volume Licensing Price Levels on May 1, 2027.

Unlike the broader changes scheduled for 2028, the new pricing will apply at the first contract renewal or extension on or after May 1, 2027.

Institutions will retain their existing licenses, pricing, and entitlements until their applicable contract terms end, subject to Microsoft’s retirement rules.

Microsoft recommends that administrators review their licenses, calculate future storage requirements, and prepare migration plans ahead of their next renewal.

Microsoft recently reduced OneDrive storage from 6TB to 2TB for Microsoft 365 Family and Premium.

The company is also retiring the Project usage report in Microsoft 365 and has introduced Copilot AI sharing for Family and Premium subscribers.

Via Neowin