Last year, only around 55,000 children were born in Finland. At a time of record-low birth rates, society cannot afford to reduce the economic opportunities to start a family for a section of the population that is of ideal childbearing age. The number of newborns is lower than it has been in decades.
In August 2017, the cuts to the student financial aid that were introduced by Parliament will come into force. The cuts and other changes to benefits will affect the income of student families in many ways. Next autumn, the study grant of low-income students with children will be reduced by 86 euros per month. The housing supplement for students with children will also go down by approximately 10–20 euros per month. This is mainly caused by stricter means tests being brought in for students with children. This is very contradictory, seeing as high living costs have a strong connection to financial issues of student families.
Social assistance is the last-resort form of income security, which students and their families are also entitled to if their income and funds do not cover necessary living expenses. Student families are more likely to receive social assistance than other students; this particularly applies to students who are single parents.
When calculating the need for social assistance the funds available to the person and their family members are taken into account as income. The entire student financial aid is calculated as a student’s available income, including the government guarantee for the student loan. During the cuts to student financial aid, it was decided to increase the student loan from 400 euros to 650 euros. Students with children are already more likely to take out a student loan than other students. When this loan amount increase of 250 euros is also calculated as the student’s income, this will cause the social assistance to be reduced. In other words students with children, unlike other people on low incomes, will have to finance costs caused by having children with a student loan to an increasing degree.
Many studies have pointed at having children as a partial cause for the differences in career and salary development between men and women. Starting a family breaks up a woman’s career and usually has a negative effect on her career and salary development. This phenomenon is called career and salary discrimination, which leads to an underutilisation of resources from an individual’s point of view, but also considering the investments in education made by society. In student families with two providers the woman is more likely to be the student and the parent who received a student grant. The majority of single parent students are women. The cuts to financial aid introduced by the parliament will not only have a large effect on student families, but it will also increase the inequalities between women and men in regards to career and salary development.
Introducing a higher level of student financial aid or a supplement for students with children would fix the loss of benefits that the cuts will cause. In addition, this would also even out the gender pay gap and would above all support women caring for children in completing their studies. Having children before moving into working life could improve the chances of creating and establishing a career particularly for women. Most importantly, it would make it possible for students with children to finance their studies with the financial aid rather than work, and offer them an opportunity to have children during or before their studies.
The writer is a Social Policy Adviser at University of Applied Sciences Students in Finland – SAMOK.