In the overall reform of student financial aid, index linking must be introduced for the housing supplement so that student financial aid can last as a system and meet the rising costs of housing. The index linking would help avoid future problems that were already encountered in the 2010s.

When students were returned to the housing supplement for student financial aid last year, the financial support they receive for housing changed from the index-linked housing allowance to the non-linked housing supplement. At the same time, changes in student housing production subsidies implemented by the Government of Prime Minister Petteri Orpo will increase the rents of new student housing by an estimated 10–11 per cent.

In other words, students are faced with a situation where housing costs will rise considerably rapidly, but support for housing is lagging behind each year. The system cannot last for long as it is.

“An increasing number of students are struggling with growing student loans, even though their income during studies should be secured. When deciding on the overall reform of student financial aid, the government must create a future-proof system, and in this respect, index linking the housing supplement is critical,” says Laura Heino, Member of the SYL Board.

If the lack of an index-linked housing supplement is not remedied, we will soon be in the same situation as in the 2010s. Back then, the housing supplement for student financial aid had not been increased for more than ten years and it had fallen hopelessly behind from the development of housing costs. At the time, the solution was to move students under general housing allowance.

SYL encourages the Government of PM Orpo to look at the problems that have already been experienced once in the past and to make decisions today that would also be sustainable in the future.

“The lack of index linking more than 20 years ago is one of the root causes of what students are experiencing now,” Heino continues, expressing frustration at the lack of historical insight in politics and our inability to learn from the past.

SYL finds that the index linking of the housing supplement would be feasible within the reform’s objective of cost-neutrality and that it would remedy the shortcomings of the student financial aid system, which is also a goal set for the reform.

Further information:

Laura Heino
Member of the Board
+358 (0)44 906 5005
laura.heino@syl.fi

Sakari Tuomisto
Social Policy Specialist
+368 (0)40 687 6353
sakari.tuomisto@syl.fi