French freshers who study away from home will qualify for an allowance of €300 (£200) to help with settling-in expenses, Prime Minister Dominique de Villepin announced.
He told an assembly of chief education officers that about 80,000 first-year students who received grants on social grounds would qualify for the one-off benefit, the Allocation pour l'installation etudiante (Aline).
Mr de Villepin said the initiative was "a very significant effort by the state in favour of students from modest backgrounds to give them every chance to succeed in their studies".
The introduction of Aline had been trailed in advance, but €300 was €100 more than claimants had expected to receive.
With presidential elections taking place next year, Mr de Villepin is anxious to rebuild his popularity among young people.
He alienated the nation's youth this year when he tried to introduce an employment scheme that would have given employers the right to dismiss workers aged under 26 years without explanation in the first two years of their first job.
Students were at the forefront of angry nationwide protests, and many universities were closed for weeks until the Government withdrew the proposed legislation.
But student unions were less than impressed by Aline, criticising in particular the scope of the scheme.
Jean-Francois Martins, chair of the Federation des Associations Generales Etudiantes, said: "The problem remains the number of recipients, which we had hoped would be greater."