Policies and development
Educational policy objectives are used to further develop student financial aid. The goal is to provide students with sufficient financial aid so that it promotes full-time studies based on the student’s plans and to help shorten the duration of studies.
Overall steering, management and development of student financial aid activities belong within the remit of the Ministry of Education and Culture.
A reform of student financial aid will enter into force on 1 August 2017 and entail the following changes:
•The amount of study grant payable to students in higher education will be lowered to the same level with the amount payable to students in upper secondary education (upper secondary schools and vocational education and training).
•Parents' income will no longer reduce the amount of study grant payable to upper secondary education students aged 18 and 19 and living independently.
•Student loan is a government-guaranteed loan that the student must pay back. The loan is applied for at a bank chosen by the student. The maximum amount of the government guarantee for a student loan will be raised from EUR 400 to EUR 650 per month for those studying in Finland and from EUR 700 to EUR 800 for those studying abroad.
•The loan guarantee for those under 18 and studying elsewhere than in a higher education institution will be raised from EUR 260 to EUR 300 per month.
•The amount of the loan to be taken into account in student loan compensation and student loan tax deduction will remain at the current level. The student loan tax deduction means that as a student makes payments on the student loan to the bank, he or she gets to deduct the amount of the student loan tax deduction from his or her taxes. The student loan compensation means that Kela pays back part of the loan. The compensation is equal to 40 per cent of the amount of outstanding student debt exceeding EUR 2,500. A student may be eligible for student loan compensation if he or she completes the degree within the target time set for the degree.
•The period of aid intended for all higher education studies will be shortened by 10 months. In future, the maximum period of aid is 54 months. In addition, the maximum period of aid per degree will be shortened by two months. The total period of eligibility for financial aid in Bachelor's and Master's degree studies worth 360 credits will, however, be 57 months.
•The number of months per year that a student may receive student financial aid depends on how much income he or she earns. The limits for students' annual income will be tied to the index of wage and salary earnings. The income limits will be adjusted every two years only if they have been raised. If a student exceeds the annual income limit and Kela needs to recover study grant and housing supplement from the student, the amount being recovered is at the moment increased by 15 per cent. This will be lowered to 7.5 per cent.
•Students receiving housing supplement will, as a rule, start receiving general housing allowance instead.