The National Union of University Students in Finland urges the government to seek options for the proposed EUR 47 million cuts in the investment aid for special groups, and the reductions in the housing allowance for low-income households, of which about EUR 120–150 million concerns students. If realised, the cuts would also hamper the supply of reasonably-priced student housing as well as students’ ability to pay rent.
Particularly the situation in the construction industry and the urgent need for student housing support the withdrawal of the proposed cut in the investment aid for special groups. Cuts have already delayed several important student housing projects across Finland. This is the worst possible time to make such cuts, as Finland is suffering from a serious shortage of student housing and experiencing the deepest construction industry recession in decades.
“Unless the government reacts soon, some students will be homeless and forced to seek housing with their friends or relatives, with construction workers unemployed at home doing nothing. With a 15% level of aid, the EUR 47 million to be cut from the investment aid would enable about EUR 313 million worth of construction projects and the provision of homes for thousands of students in need of housing,” points out SYL board member Sonja Naalisvaara.
However, it is not enough to secure the availability of housing if students cannot afford to pay rent. That’s why, in the budget session, the government must seek ways to avoid making cuts in housing allowance, particularly when it comes to students in the lowest income bracket. The most direct solution would be to abandon the plan to reduce the earnings-replacement rate for housing allowance.
The monetary benefits of full-time students are insufficient as it is, and the proposed average cut of EUR 76 in student housing allowance would create difficulties particularly for students who are, in general, getting by with very little. In the extreme scenario, some students would be forced to give up studying. In proportion to students’ income, the cut would be significant, 6.6–9.6% depending on their municipality of residence.
“Students with the lowest income do not have the opportunity to compensate for the cuts by working due to reasons related to the demanding nature of their studies, family or illness, for example. Of higher-education students, 19% have children and 20% do not have a full capacity to study. The cuts would hit these students in the worst possible way,” says SYL board member Jenny Kasongo.
The government led by PM Petteri Orpo will convene for its first budget session next week, on 19 and 20 September 2023. In the budget session, the government will negotiate and decide the state budget for 2024 and the subsequent fiscal efforts to be taken.
President of SYL
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