She's an adult and you don't owe her anything.
I thought they'd ended bursaries as well but whether or not that's where some of the £700 a month is coming from, it's a lot of money. And even if it wasn't, it's her decision to fund this degree at this time in her life, no one else's, and you're not obliged to give her anything.
She's 23, not 13 ffs.
sonic, it's not up to her dad to give her financial support unless he wants to and it's up to her mum to put a roof over her head if she so wishes. It's on her, she's not doing OPs DH a favour. Don't be daft.
I assume you're going to say the DH was solely supporting DD and not her mother nocry? Well we don't know do we. She might have been getting spousal maintenance. And even if it was child support, he didn't owe her that once DD turned 18 so anything extra was a vibe bonus, not an obligation.
OP, you're a step parent. You're probably going to get slated. Sorry, that's just how it often is round here.
The DD is an adult. If you're able to help her out without screwing yourselves financially then that's nice of you. If she's happy to take your money leaving you both short while she has more disposable income than you do, she wants to grow up a bit and take responsibility for her life and her decisions.
Again, if her mum wants an adult lodger who costs a fortune, good for her. But it's no one else's job to subsidise the decision.