Giving more cash to schools for deprived students through the pupil premium is more important than the education maintenance allowance in ensuring teenagers stay in education after 16, the Government has said.
A Department for Education evaluation of the impact of introducing new bursaries with less than a third of the funding of the EMA said that the investment in the pupil premium was a greater priority than post-16 student support to addressing inequality in education.
The report said: "We know that prior attainment is the strongest factor in predicting participation in education and training post-16 independent of the specific financial support that is available. This drives a decision to reprioritise investment to address educational inequalities."
It said the investment next year in the pupil premium would be pound;625 million, roughly equal to this year's spending on the EMA. By 2015, it would reach pound;2.5 billion a year. The department said that by tackling disadvantage at an early stage, students would be more likely to succeed up to GCSE level and to want to stay in education.
It also claimed that the investment to ensure that there was a place in education for all under-19s by 2015 is "a major investment in the most disadvantaged, who are disproportionately represented among those that do not participate".
Shane Chowen, vice-president for FE at the National Union of Students, said: "The pupil premium isn't something that today's students will benefit from themselves. Whatever turns out to be the benefit from it, it won't be felt in post-16 education for five or 10 years."
But he said that local decisions like the one in Cumbria to cut funding for travel for 16 to 19-year-olds showed that there was a pressing need for better support for post-16 students from September.
He said: "How are they going to help people on a discretionary basis when everyone there now needs a bus pass?"
The report said that there would be a new need to communicate details of the bursaries administered locally by schools and colleges, and it conceded that the system could be open to "unintended discrimination" by gender, disability or ethnicity. It said the department will consider whether there should be a central appeals system to resolve disputes.
Payment methods will form part of the consultation before the new system begins in September, but the report suggested students without bank accounts could be paid in cash.