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Student loans for the autumn can be taken out starting 1 August
Kela has reviewed the student loans for the academic year 2018–2019 for students who continue their studies. Decisions on loan guarantee for the next academic year has been sent to 111,390 students. The first loan disbursement can be taken out starting from the beginning of August.
The usual amount of student loan is EUR 650 per month. A student can thus receive EUR 2,600–3,250 in student loan in the autumn and usually EUR 3,250 in the spring. Most students can take out their student loans for the academic year in two disbursements.
The student must agree with the bank on when and how to take out the student loan. The student can decide whether he or she will take out the student loan and to what amount. If the student loan for the academic year 2017–2018 has not yet been taken out, the loan can be taken out before the end of July.
A positive decision on loan guarantee was now sent to 110,270 recipients of student financial aid and to 860 recipients of adult education subsidy. The right to loan guarantee for 3,840 students who continue their studies will be decided later at the same time as the student’s application for financial aid or other pending issue is processed. Students can check the validity of the loan guarantee via Kela’s online customer service or telephone service.
A year ago, 103,750 students received a decision on loan guarantee.
Payment default is not a hindrance for the granting of a loan guarantee
Payment default is no longer a hindrance for the granting of a loan guarantee, but if the student’s earlier student loan is subject to collection by Kela, no new loan guarantee is granted.
However, loan guarantee can in certain situations be granted despite an earlier student loan being collected by Kela. With the negative decision, Kela sends more detailed instructions explaining in which situations loan guarantee can be granted.
This time, 260 students were denied loan guarantee because of collection of an earlier student loan. Last year, 210 students received a negative decision.
The emphasis in student financial aid is on student loan
Since August last year, the student financial aid has mostly been student loan. Typically EUR 650 per month of the financial aid is student loan and EUR 250 per month is study grant. The proportion of study grant in the total amount of student financial aid has not been this low since the beginning of the 1990s.
Students are nowadays covered by the general housing allowance scheme, which compensates for the increased emphasis on student loan in the financial aid scheme. The average housing allowance awarded to households made up of one student has been approximately EUR 290 per month.
For higher education students, the use of student loan is also affected by the student loan compensation. If a higher education student who has started his or her first higher education studies after 1 August 2014 graduates within the prescribed time, Kela can pay part of the student’s student loan in the form of a student loan compensation. The compensation is paid directly to the bank and it can be as high as one-third of the student’s student loan.
Higher education students who started their studies before 2014 can receive a more or less equivalent benefit in the form of a student loan deduction in the taxation.
The average interest rate for new student loans taken out in the spring was 0.52%, according to statistics from the Bank of Finland. The interest rates on student loans have never before been this low.