caught by the revocation of London Metropolitan University's licence to admit and teach international students.
LMU's licence was revoked on August 29, throwing the academic future of over 350 Indian and over 2,250 other non-EU current students in disarray.
After the licence revocation, they are required to apply for similar courses in other universities and reapply for student visas.
Universities minister David Willetts told a conference of Universities UK that the 2 million pounds fund was intended to "to help legitimate overseas students at London Met who face extra costs through no fault of their own".
The money will be used to help with the costs of students transferring to other universities and to make new visa applications. Those unable to transfer to another university by December 1 will be required to leave the UK within 60 days. Soon after the licence revocation, Willetts had set up a taskforce to help current students transfer to other universities to pursue and complete their courses.
The taskforce is in the process carrying out its mandate. LMU, meanwhile, has filed a judicial review petition in the high court, challenging UK Border Agency's decision to revoke its licence.
UKBA had revoked the university's licence citing "serious and systemic failures".
During his speech at Keele University, Willetts indicated that the government was considering the demand of almost all stakeholders in higher education to remove the numbers of international students from overall immigration figures, since most students return home after completing their studies. Willetts told the conference that the government wanted to publish more detailed figures on overseas students that "disaggregate" them from total figures on net migration.
He said the Office for National Statistics was working on ways to "better count students in immigration flows".