Changes to financial aid and housing assistance for students, 1 August 2017

Changes to the legislation on student financial aid and housing allowances will affect the financial aid available to students in many ways. The changes will take effect on 1 August 2017.

The study grants paid to higher education students will be adjusted to the level of the grants provided to students at the secondary level (max. €250.28 per month). Student loan amounts will be raised for all students. Students living in rented accommodation in Finland will be covered by the general housing allowance scheme. The qualifying conditions for study grants and government guarantees for student loans will undergo numerous changes as well.

Students to be covered under the general housing allowance scheme

Payment of the housing supplement for students will end, and students renting an apartment in Finland can claim general housing allowance starting 1 August 2017. Students can calculate the amount of housing allowance available to them with the housing allowance calculator at Beginning in August 2017, study grant payments count as income for purposes of the housing allowance.

Students who qualify for general housing allowance and know beforehand how much income they will have and what their housing circumstances will be like starting in August, can use Kela's online customer service to file a claim for housing allowance as early as May 2017. Persons sharing a household must claim general housing allowance together. If one member of the household already receives general housing allowance payments, he or she must apply for a review of the allowance.

Kela will discontinue student housing supplement payments automatically for those being transitioned into the general housing allowance scheme. However, the housing supplement will remain available to those living and studying abroad as well as for students who are enrolled in a tuition-based study programme in a Finnish folk high school or sports institute and who live in a school dormitory.

Changes to financial aid for higher education students

The study grants paid to higher education students will be adjusted to the level of the grants provided to students at the secondary level (max. €250.28 per month). Currently, students in higher education receive study grant payments of either €336.76 or €303.19 per month depending on when they began their course of study.

The maximum period of time for which financial aid is available for higher education study will be shortened from 64 months to 54 months for students who already have earned one degree and who begin studying for another higher education degree in or after autumn term 2017. The maximum duration of aid per degree will be shortened as well. Unlike the other changes being implemented, the two-month reduction in the maximum period of financial aid only applies to new higher education students, i.e., those who begin their first course of higher education study in or after autumn term 2017.

Student loan amounts raised, loan access conditions eased

The amounts of government guaranteed student loans will be raised. The most typical loan amount of €400 per month will go up to €650. Under the new rules, secondary-level students under 18 years of age are eligible for a student loan of €300 per month, while students going to school abroad can get €800 per month. Despite the increase in the amount of loan available, the student loan tax deduction and compensation will remain at their present level.

Starting with autumn term 2017, credit report problems will no longer prevent students from qualifying for a government loan guarantee. Access to student loans is also eased by allowing secondary-level students to take out all of their loan funds for one term at once, just as is currently case with students in higher education.

Means test rules for student financial aid eased

The percentage of increase applied to student financial aid recovered after an income review is reduced from 15% to 7.5%. The 15% rate will still apply to the income review for the year 2015, which will be carried out in February 2017. The new rate of 7.5% will be in effect starting with 2016.

The limits on allowable annual income will be increased in 2018. The rate of increase is based on wage growth and will be known in late 2017.

The means test rules applicable to parental income will be eased as well on 1 January 2018. After that, parental income will no longer affect the ability of students at the secondary level who are 18-19 years of age and live independently to qualify for study grants.

Financial assistance for students increased

Owing to the increase in the amount of student loan funds available and the changes affecting housing aid, most students will be eligible for a significantly larger amount of financial assistance. The monthly amount of available aid may increase by as much as €450. For low-income students living alone in rental accommodation, the monthly aid package consists of a study grant payment of about €250, a €650 student loan, and a €275-€405 housing allowance, depending on the municipality in which they live.

The amount of aid available will decrease for those higher education students who do not qualify for the general housing allowance because of the income of their spouse or partner or of another household member. The amount of aid will go down by €5 to €40, because the increased amount of student loan funds available does not fully compensate for the reduction in the study grant and the discontinuation of the housing supplement payments.

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