Post-16 students from low-income homes who live in Wales but study in England will still be able to claim the education maintenance allowance (EMA) after it is scrapped in England.
Education minister Leighton Andrews announced that Welsh-domiciled students can claim the weekly cash grant wherever they study within the UK, provided they meet the criteria.
The EMA scheme in England will close on 31 August 2011 and will be replaced by the enhanced discretionary learner support fund (DLSF) for those in extreme hardship.
According to figures from the Young People's Learning Agency in England, 897 Welsh-domiciled learners received the maintenance allowance from England in 200910.
Under the new proposals, those students will continue to receive money as long as their colleges agree to co-operate. The colleges will need to give the Assembly feedback proving that the students have met sufficient levels of attendance to qualify for the money.
Mr Andrews said: "Contact has been made with those learning centres which we know usually have Welsh-domiciled learners in attendance, to establish their willingness to participate in our scheme."
The EMA Wales scheme was introduced for 16-year-olds in 200405. It expanded to include 17-year-olds in 200506 and 18-year-olds the following year.
It aims to address the link between low income and low participation by providing a financial incentive to students from low-income households to stay in school and college beyond compulsory education.
Last July a series of changes were brought in to target those most in need of the grant, including phasing out the lower #163;10- and #163;20-a-week payments and scrapping the periodical #163;100 bonus for meeting learning objectives.