The pledge comes after the UK this month turned down an offer to continue participating in Erasmus after Brexit, which prompted some backlash from higher education leaders who expressed concerns around the potential loss of opportunities for young people.
But Ms Donelan has insisted that the “global alternative” called the Turing Scheme - named after pioneering mathematician and World War Two code breaker Alan Turing - will open up more opportunities especially for disadvantaged and disabled students and help social mobility.
Ms Donelan, who graduated from the University of York, told The Yorkshire Post: “We have got to remember the flaws of Erasmus. Students from advantaged backgrounds were 1.7 per cent more likely to engage with it.
“It didn’t widen access and participation and it didn’t cater particularly for students from disadvantaged backgrounds, whereas we have made that a key objective here.”
The scheme formally launches this September, and primarily caters for higher education students, those in sixth forms, colleges or other further education, as well as vocational education and training courses.
The higher education placements will last for between four weeks and 12 months. The further education and vocational placements will last between 10 days and 12 months.
A key difference between Erasmus and Turing is that only disadvantaged students will now receive reimbursement for travel expenses. This is up to £480 for European countries, or up to £1,360 for countries further afield, staggered by their distance in kilometres.
It will also provide poorer applicants with additional expenses, such as the costs of visas, passports, and health insurance.
Ms Donelan, who was the first in her family to go to university, said: “This is a great opportunity for a generation that has been through such a really difficult and challenging year. This offers some light at the end of the tunnel and a great experience.”
The government has allocated £110m for the first year of the scheme, which starts in 2021/22, but it is not currently funded after that.
"This is the first year of many, upon which we will build on this scheme to offer these life changing opportunities. It's a fundamental part of our levelling up agenda," Ms Donelan said.
While welcoming the “global” ambition of the Turing scheme, Dr Peter O’Brien, the executive director of Yorkshire Universities – a group representing 12 institutions in the region, said he hoped the long-term plan lives up to the reality.
He said: "It’s about the finer detail of this - broadly we would all support the whole notion about building stronger bridges with different countries and different communities across the globe absolutely.
"But it’s important students from all disadvantaged backgrounds are able to benefit - we have got to make sure they can afford that and that we aren’t limiting people’s chances through this."
He added: “Like a lot of things, the first year will be about testing how the Turing scheme will work.
"For the longer term it’s about building those longer term relationships, which will bore fruit for individuals, institutions and places in Yorkshire.
"I would hope the Turing scheme... Can build up over a period of time and create something that is pretty meaningful."
The Turing scheme
The Turing scheme opened for applications this month and will provide funding for more than 35,000 students to go on placements around the world from September.
The key difference between the two schemes is that Erasmus catered for mostly European Union countries, whereas the Turing Scheme includes countries across the globe.
Before the UK left as an EU member, roughly 15,000 British students a year used the Erasmus scheme to travel, study and work with universities in Europe for three to 12 month intervals in their degree.
Since 2014, almost £900m of funding has been distributed to UK Erasmus projects, with more than 930,000 participants involved.
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