The Welsh Government has announced that sixth form and college students from low-income households will receive a £10 grant increase to help with travel and food costs.
The Education Maintenance Allowance (EMA) was frozen at £30 for almost 20 years.
The new higher remuneration applies from the beginning of the summer semester.
However, student representatives said more needs to be done to reduce continuing education costs.
Welsh Education Secretary Jeremy Miles announced the increase on Monday and said there would also be a “full review” of the scheme.
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Continuing education students are eligible if their household income is £20,817 or less if they are the only young person in the household, or £23,077 if there is more than one young person in the household.
Around 16,000 young people in Wales are currently receiving the payment.
Lily, 17, who is doing her A-levels at Gower College in Swansea, said she relies on EMA for college materials.
She said it’s hard to say what impact the extra 10 pounds a week will have, but added: “I’d like to think it’s a good start and will help in the future.”
Tiana, 19, from Swansea, said some students struggle with the cost of travel, which can be a significant barrier to accessing education.
“I often feel that students struggle to get into college so they don’t get through, which obviously has a dramatic effect on their learning – missing classes can lead to failure.”
She said most of the students in her class drive to college, so they have to pay for gas.
“Eating, drinking, snacks, printing, printing paper and resources, buying pens, books, pencil cases, calculators — all of these things are becoming increasingly expensive, making it difficult for students across the board,” she said.
According to the Bank of England Inflation Calculator, the £30 payment first introduced in 2004 would now be £50.13 if the payment had kept pace with inflation.
Jeremy Miles said raising the EMA would help students see “the reality of the cost of learning”.
“We appreciate that the EMA rate has not increased in a while, and during the current cost of living crisis, we understand that young people are also feeling the financial strain,” he said.
“As we work to conduct an independent review of the EMA, this increase will provide additional help to remove barriers to learning.”
He said the increase would apply for the next two academic years while the EMA review is conducted.
Mr Miles added that there will be funding to allow more students from poorer backgrounds to contest exam results free of charge in the summer of 2023.
National Union of Students Wales President Orla Tarn said the union was pleased the government had taken action to prevent young people being “priced out of education”.
But they warned that there is more work to be done.
“Students across Wales are facing a perfect storm of soaring rents, bloated bills, massive hikes in food prices and transport costs, forcing learners to choose between attending classes and paying for their meals,” they said.
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