I don't know the full answer in your case but I know where to look! Here: -
http://www.direct.gov...alasset/dg_174587.pdf
This weblink downloads the 28 page document 'Higher Education Student Finance - How You Are Assessed And Paid'. This is the reference book that will enable you to work out whether they got it right according to the 'rules' - or not.
You will presumably have worked your way through the difference in assessment between a Dependent Student and an Independent one? You are definitely an Independent - not least because you have young children. Dependent students have to have their financial assessment made in conjunction with their parents income - so this doesn't apply to you, even though you are under 25.
The book is complicated I'm afraid. You need to check that the COURSE is eligible for assistance (I assume you've already established that it is).
You should be entitle to a Maintenance Loan - which is paid back, of course, later.
But the issue for you, I imagine, is whether you are entitled to a Maintenance Grant, or if not, a Special Support Grant.
I can't comment on that without knowing more about your circumstances. I suggest that you work your way through the booklet.
This booklet does come via the DirectGov site but I agree it is devilishly difficult to find it.