Student financial aid in Finland yesterday and today. What about tomorrow?

The Finnish student financial aid had its beginnings 50 years ago. In this text our adviser analyses how the government has wanted to develop the aid in the short and the long term. On the other hand, why was the system created in the first place, and what are its goals meant to be in the future?

The government’s message about developing student financial aid in the 2010’s is nothing if not consistent.

Spurs students into studying more effectively.
Spurs students into graduating quickly.
Reforms financial aid for students in a way that raises the level of the aid while decreasing its expenses.

The above statements are objectives and effect evaluations in government’s proposals. They were written when the Student Financial Aid Act was tweaked during the last two terms. The common thread has more or less been that government expenditures must go down, students need to study at a faster rate and then go on to pursue careers to bring in tax revenue. Political leaders have changed in the meantime, yet the message has not.

In the last ten years, the government has saved 82 million euros in its budget by tapping into the study grant of higher education students. This has drastically changed the everyday life of students and graduates.

  • Students have to supplement their monthly subsistence with income from work, with their parents’ support or with student loan in order to cover their essential living costs.
  • There are fewer aid months and they run out for some during their Bachelor or Master programme.
  • Those who graduate within target time may be eligible to a loan compensation of up to 6,200 euros.
  • A graduate may be 30,000 euros in debt; 38,000 euros if they studied abroad.

Why was the student financial aid created and what are its goals?

From a historical perspective, the goal of student financial aid is to secure Finnish people of all backgrounds the possibility to study. After all, education benefits the entire society. Finnish society has wanted to make sure that everyone has the opportunity for higher education, regardless of their own or their parents’ wealth. Financial aid for students has prevented higher education from becoming the exclusive right of the economically advantaged. From the viewpoint of Finnish society, highly educated people were crucial in achieving economic growth when we were building the welfare state. Our growth has been due to our high level of expertise.

I believe that this equal opportunity is something we want to strive for even today.

Over the decades, reaching this goal has meant various ways to develop the financial aid:

In 1969, this meant a government-guaranteed student loan.
In 1972, it meant adding the study grant and in 1977 adding the housing supplement to the student financial aid.
In 1983, it meant interest assistance.
In 1992, it meant an emphasis on the study grant.
In 2005 and 2014, it meant added elements to the student loan compensation.
In 2017, it meant including students in the general housing benefit system.

Opintotukirock 1991 (Rappiolla / Hassisen Kone)

The pressure for the great reforms to student financial aid in 1992‒1994 and in 2017 has come from the need to adjust state finances. In the 90s, this meant going from student loan to student financial aid with an emphasis on study grant, in 2017 it was the other way around. The last decade especially has shown education policy objectives being prioritised over social policy goals. The ambition for equal opportunity has transformed into accelerated production of “more and faster” degrees.

The need for a high level of expertise is greater than ever, and the educated portion of the next generations needs to be higher. If this comes to pass, it will also increase expenses and the number of people needing social security for studying. People from many different backgrounds seek education, and they all need different kinds of support. One person is in their first stage of adulthood, another is returning to develop their expertise alongside their first career. The third person raises their children alongside their studies, the fourth is rehabilitating from a long illness and needs a degree. We must secure each and every one of them the opportunity to study.

What do we want student financial aid to be in the 2020’s ‒ or do we want to support individuals who can study and develop their expertise?


Jani Sillanpää

The writer is Social Policy Adviser at SYL.

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