An extra £40m to help students struggling in the coronavirus pandemic will be given to Welsh universities amid outcry over rent and tuition fees.
Hundreds of students threatened to withhold payments after being unable to return to campus due to Covid rules.
Universities had offered rebates to those affected ,but some students claimed they were not being treated fairly or getting enough support.
The Welsh Government said it recognised the difficulties students had faced.
Face-to-face teaching has, in the main, been suspended and many students have remained at home following the Christmas break as coronavirus cases across Wales continued to rise.
Staggered returns are being introduced in order to "help stop the spread of the virus in student accommodation", but a return to face-to-face learning has been delayed for most students amid Wales' strict lockdown.
There are about 130,000 students at Wales' universities and some had called for support, saying it was unfair they were having to pay rent for rooms they could not live in and facilities they could not use.
All universities have offered rebates or rent holidays to students living in university-run halls unable to return to campus.
However, campaigners had said the offers were inadequate as only certain students were eligible - and many were struggling due to being unable to work part-time in bars and pubs to cover living costs.
Some had spoken of having to sell clothes to pay for food and rent after being unable to work alongside their studies.
How have students responded?
Emily Evans, a second year theatre and drama student at the University of South Wales in Cardiff, said she would use the money to pay off debts.
"I haven't really had the full experience of uni, especially as we're in a pandemic I can't really spend it anywhere else," she told BBC Radio Wales Breakfast.
"It's kind of all up in the air at the moment, we're waiting for information as it comes through. We're kind of being told very last minute at the moment."
As a drama student, she said it was very difficult to study online, without face-to-face teaching.
"It's such a practical course and I signed up to be face-to-face, so I get it's unpredictable times but it's difficult because we have to act online and things are kind of different to what you think it would be," she said.
"That's not what I thought I would get out of the degree. I feel like we can't show our full potential and get what we need out of it because we're kind of stuck.
"It's such an unpredictable time we're in so I can't really be overly disappointed, but it's a lot to deal with because we're paying so much money to be there for it.
"It's £9,000 we're going to have to pay back one day for something we're not having the full experience of, so there is slight resentment because we're kind of on the back foot right now."
Ebony Banks, president of Wrexham Glyndwr Students' Union, said: "Obviously the £40m is a huge relief to not only institutions but students' unions as well."
She said as soon as more details on the money allocation were announced, the union would be "working very closely with the institution to make sure that it goes into the best possible pockets and to ensure that the money goes where the students need it".
"I think it's enough. It's definitely advantageous to students," she added.
The National Union of Students welcomed the refunds for tens of thousands of students but added it was "vital" funding reached those living in private accommodation.
"The pandemic has exposed the fragility of the private rental market for students," NUS Wales president Becky Ricketts said.
"I will keep the pressure on the Welsh Government to strengthen protections for student renters longer term, such as more flexible notice periods."
Speaking at the Welsh Government's coronavirus briefing, Education Minister Kirsty Williams said students had suffered a huge amount of disruption this year "especially as the effects of the pandemic has increased as we've moved into the winter months".
"Despite the tremendous work of our universities, their staff, students, and volunteers, with additional testing and plans in place to make learning as safe as possible, the new Covid strain has unfortunately made it necessary to ask the majority of students to study at home for the time being," she said.
"This means that tens of thousands of students are now helping to keep Wales safe by staying away from campus.
"Many of our students have needed to pay for their term-time accommodation, while, for very important public health reasons, not being able to actually live there."
She added "a large proportion of students are also unable to access the part-time jobs that they would normally rely on" and so the new funding should be used to support "students facing financial hardship, helping the students most affected by the pandemic".
The funding comes on top of £10m already allocated to help students facing financial hardship or needing mental health support during the pandemic.
Also during the briefing, Ms Williams said she was "deeply disappointed" by the UK Government's decision to withdraw access to the EU's Erasmus university scheme, which helps students study in other countries.
She said the UK alternative Turing scheme was a "poor replacement" and she would work with counterparts in the other devolved administrations to see if there was a way to rejoin Erasmus.
She added Wales had provided "the most generous student support package in Europe" during the pandemic
What is the reaction from universities?
Six of the seven universities in Wales have broadly welcomed the announcement, though were awaiting further information from Welsh Government.
Cardiff University said the details of the funding were still being worked through and it would be able to update students once it received further information.
Universities Wales, the group that represents Wales' universities, said lecturers and university staff had worked "tirelessly to deliver a rewarding learning experience while also providing important pastoral and well-being support for students".
"This additional funding will further support this work and make a real difference to students across Wales," chairwoman Prof Julie Lydon said.
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How have opposition parties reacted?
Bethan Sayed, Plaid Cymru spokeswoman for post-16 education, who had previously called for rent rebates, welcomed the extra funding.
She said: "I would expect some clarity from the Welsh Government, however, on the small print of this support, and who is eligible to receive funds, and ensure that those who are in private rented accommodation can be supported also."
Tory education spokeswoman Suzy Davies welcomed the funding but said it should be "ringfenced" for those in hardship.
She added: "Online learning cannot replace in-person teaching, with students unable to use the full resources that a university offers.
"The Welsh Government needs to ensure that universities can offer a partial refund for the current academic year, as well as ensuring that students can afford to continue to afford their courses in September."
The Welsh Government said universities and student unions would be able to provide students with information about how to access support during the pandemic.