Description of Benefit 2018: Statistics on financial aid for students

This text has been created for statistical purposes. Up-to-date information on benefits can be found on www.kela.fi/english.

Financial aid for students

Student financial aid includes the study grant and the government guarantee for a student loan. Some students also receive a housing supplement. The purpose of student financial aid is to provide economic security for full-time students. Administration of the state-financed student financial aid scheme is one of Kela’s responsibilities. Student financial aid is governed by the Act on Student Financial Aid and other related provisions. Amendments to the Act are described in the appendix to Kela’s Statistical Yearbook.

Financial aid is available to citizens of Finland who are studying in Finland. Persons studying abroad are eligible for financial aid if it is available for the corresponding course of study in Finland or the course of study is part of a programme being completed in Finland. In certain situations, financial aid can be granted to foreign nationals studying in Finland or abroad.

Student financial aid can be granted for post-comprehensive school studies lasting at least two months without interruption. Conditions for entitlement

  • upper secondary school studies
  • vocational education
  • studies for a higher education degree
  • other separately defined studies.

Financial aid for students is also available for basic education for adults.

Duration. Student financial aid is usually paid for nine or ten months in a single academic year. The aid can, on application, be granted for a shorter period of time, or for a longer period of time e.g. on the basis of summer studies. Financial aid is granted for calendar months consisting of at least 18 days which are included in the time entitling to student financial aid. The maximum duration of financial aid depends on the extent of the studies pursued.

Study grant

The amount of the study grant depends on the student’s age, housing situation and marital status. Students under 17 years of age are not entitled to the study grant because their provider is paid child benefit for them.

Basic amount of the study grant in academic year 2018/2019:

  Amount of study grant,
€ per month
Living with his/her parent
    aged under 20
    aged 20 or over

38.66
81.39
Living independently
    under age 18
    age 18 or over

101.74
250.28
Married 250.28
Provider of a minor child 325.28

Effect of the student’s own income. The student’s own income is considered as income for means testing purposes throughout the calendar year. Taxable earned income, capital income and income from abroad count as income including tax-free grants and scholarships received in or before 2018. The annual income limit depends on the number of months for which a student takes out financial aid: for each month in which a student is paid study grant or housing supplement, the exempt amount is on average €667, and for each aid-free month €1,990.

If a student’s income exceeds the annual income limit, Kela will recover one month of study grant and housing supplement for each €1,323 (or part thereof) that the annual income exceeds the annual limit. If the limit is exceeded by €222 or less, the benefit is not recovered. The amount to be recovered is increased by a recovery charge.

Effect of parental income. Parental income affects the amount of the study grant for upper secondary-level students who are under 20 years of age and live with a parent. If your parents’ combined annual income is €41,810 or more, the study grant will be reduced. And if your parents’ income is €61,000 or more, you will not be entitled to any study grant at all. Until 31 December 2018, parental income had an effect also on the amount of study grant available to independently living students under 18 years of age

‘Income’ here refers to net earned income and net capital income. If the parents’ income level is low, the study grant can be awarded at a higher rate provided that the student lives with a parent or is under 18 years of age and lives independently.

The study grant is taxable income.

Housing supplement

Most students are covered by the general housing allowance scheme. Housing supplement for students is only available to students who are enrolled in a fee-based programme at a Finnish folk high school or a comparable educational institution, and who live in a school dormitory. The housing allowance is in this case €88.87 per month. Housing supplement is also available to students studying abroad or in the Åland Islands, if they live in rented accommodation. The housing allowance they are paid is as a rule €210 per month. To qualify, students must both live and study abroad or in the Åland Islands.

The amount of the housing supplement is affected by the student’s own income. And, until 31 December 2018, parental income also affected the amount of the housing supplement in the case of students under 18 years of age who were studying at the upper secondary-level and living with their parents. The students’ own income as well as the income of their parents are taken into account on the same grounds as when means testing the study grant. Your spouse’s or partner’s income does not affect the amount of the housing supplement.

The housing supplement is not subject to tax.

Government guarantee for student loans

Students who are paid study grant are eligible for a government student loan guarantee. In certain cases, a student loan guarantee may also be granted to students who are not eligible for study grant. The government guarantee is granted for one academic year at a time.

Government student loan guarantee: Amount per month of aid in academic year 2018/2019:

  € per month
Higher education students 650
Other students
           under age 18
           age 18 or over

300
650
Students studying abroad 800

While the loan is guaranteed by the government, the loan application must be made to a bank. The rate of interest and other terms of the loan, except for those set out in the loan guarantee decision, are agreed between the bank and the student. If the borrower neglects to pay the interest or make a repayment, the bank may submit a claim to Kela for repayment of the entire loan. If Kela, being the guarantor of the loan, has to pay the loan back to the bank, Kela will collect the debt from the student including the interest specified in the Decree on Student Financial Aid. An exemption from the repayment of a student loan may be granted under certain conditions.

Other benefits under the Act on Student Financial Aid

Interest assistance

Kela can pay the interest due on a government-guaranteed student loan. This is called interest assistance. Persons with a student loan debt who have completed their studies may be eligible for interest assistance if their taxable income does not exceed €1,350 per month in the four months preceding the due date of interest payment. This limit is increased if a person with student loan debt has underage children of their own living with them, or if their partner’s underage children are living with them.

To persons with student loans who are performing conscript service the interest on the loan is not paid in the form of interest assistance, but in the form of conscript’s allowance.

Student loan compensation and tax deduction

If a student completes a higher education degree within the target time, Kela can pay a portion of the student loan. The student loan compensation is a repayment, made by Kela, on your student loan and it can amount to as much as one third of the loan amount. The student loan compensation only applies to students in higher education who started their first higher education studies on 1 August 2014 or later.

Students who started their first higher education studies before 1 August 2014, may be entitled to a student loan tax deduction. Students who started their higher education studies between 1 August 2005 and 31 July 2019, may get a student loan tax deduction if they complete their degree in the target time. When, having completed their studies, they start repaying their student loan, they can deduct the amount of the student loan deduction from their taxes.

The student loan compensation is 40% and the student loan tax deduction is 30% of the qualifying student loan debt exceeding €2,500 – but no more than a specified amount. As a rule, loan compensation and tax deduction are granted without application.

Meal subsidy

Higher education students get a discounted meal at cafeterias participating in the meal subsidy programme. Kela pays the subsidy to the cafeteria operator, who discounts it from the price of the meal. The cafeterias operate within maximum prices set by the Council of State. The amount of the meal subsidy has stood at €1.94 per meal for the last several years.

Loan guarantees for mature students

Adults who leave work in order to study are eligible for an adult education allowance in respect of studies leading to a degree or part of a degree, and during further vocational education and training. A student loan guarantee is also available from the government. The adult education allowance is granted by the Employment Fund (until 31 Dec 2018, by the Education and Redundancy Payments Fund) and the government student loan guarantee by Kela. Students who are granted the adult education allowance for a continuous period of at least eight weeks are entitled to a student loan guarantee from the government. The provisions of the Act on Student Financial Aid apply to the guarantee. Recipients of adult education subsidy may, however, be granted a loan guarantee also for other programmes of study than the programmes under the Act on Student Financial Aid. The loan guarantee for the adult education allowance equals €650 per month (for studies in Finland) or €800 per month (for studies abroad).