Recovery of student loan debt repaid under the government loan guarantee

If Kela has guaranteed your student loan and paid it to the bank, Kela will collect the whole amount paid to the bank from you. Kela terms this amount the student loan debt. The interest rate charged on the student loan debt is 4% from the beginning of 2018.

Payment arrangements  

Pay the entire amount due in a single payment. If you cannot pay it in a single payment, you can contact Kela’s Overpayment Recovery Centre to discuss paying it back in instalments.

In that case, do as follows:

  1. Log in to OmaKela using online banking codes or a mobile certificate.
  2. On the front page of OmaKela you can check your recovery matters. Select the recovery matter for which you wish to suggest payment in instalments. After that, select Ehdota maksusuunnitelmaa.

    Alternatively, you can call the Overpayment Recovery Centre to discuss your options for paying back in instalments the amount that you owe.

If you cannot contact Kela via the e-service OmaKela or by phone to discuss your case, you can also send a freely formulated letter where you suggest a payment plan. Mail the letter to Kelan perintäkeskus, PL 31, 00056 KELA.

When drawing up a plan for payment in instalments, Kela considers your financial situation, the amount of the debt and the remaining time of collection.

If your financial circumstances take a turn for the worse and you are no longer able to follow the agreed payment plan, contact the Overpayment Recovery Centre before the due date. That way we can discuss an amendment to the payment plan.

Kela transfers the debt to the enforcement authorities for collection if you do not pay back the debt or your income is not high enough to make a payment plan.

Exemptions from payment

If your income is small and your student loan is recovered by the bank, you can apply for interest assistance from Kela. If your income is small and Kela has repaid your student loan to the bank, you can apply for exemption from the payment of interest from Kela.

You can be exempted from paying interest on the amount owed under the loan guarantee for any period in which your average taxable income does not exceed the maximum income limit for interest assistance. The income limit is higher if you have dependent children of your own or if dependent children of your spouse or partner are living with you.

As of 1 March 2020 the income limits are as follows:

  • no children: €1,404 per month
  • 1 child: €1,621 per month
  • 2 children: €1,680 per month
  • 3 or more children: €1,780 per month.

The income limits are adjusted every other year in line with the increase in wages and prices.

An exemption from the payment of interest can be granted afterwards, i.e. retroactively, for up to one year (= month of application + 12 full calendar months preceding the month of application)

  • If you have especially weighty reasons, you can also be granted exemption for a  longer period than one year.
  • in advance, i.e. for a future period, if you know that in future your income will not exceed the maximum income limit for interest assistance. Exemption is usually not granted beforehand for more than one year at a time (= month of application + subsequent 12 full calendar months).  
  • for a period in which you will receive benefits from Kela (such a sickness or parental allowance).

If you are unemployed, your future incomes will be assessed individually.  

  • If you have only recently become unemployed, you can be granted exemption from the payment of interest for a maximum of 3 months (= month of application + 3 subsequent full calendar months).
  • If you have been unemployed for an extended period, you can be granted exemption for a maximum of 6 months (= month of application + 6 subsequent full calendar months).  

You can be granted exemption from payment of the whole debt if

  • your income is less than a specified limit
  • you are permanently incapable of work or you have been continuously incapable of work for at least 5 years.

Kela can only grant exemption from payment when Kela recovers a student loan from you. Kela cannot grant exemption from payment if the bank recovers a student loan from you.

How to apply for exemption from payment

  1. Complete the application form Maksuvapautus opintolainan takaussaatavasta OG6 (PDF, in Finnish).
  2. Get the necessary supporting documents. The application form lists the supporting documents that Kela requires. If the document you are sending is not in a digital format, you can either scan it or take a photograph of it.
  3. Send your application and supporting documents through the OmaKela e-service.

    Alternatively, you can mail the application and the supporting documents to Perintäkeskus, PL 31, 00056 KELA. You can also apply for an exemption from payment by calling the Overpayment Recovery Centre.

Kela gets information on you wage income and benefits paid out from the national incomes register. This information is used when processing your application. Kela may ask you for further information.

Waiving recovery of student loan debt repaid under the government loan guarantee

In certain situations Kela may waive the recovery of student loan debt repaid under the government loan guarantee.

A prerequisite for a waiver of the recovery is that

  • the amount of debt is small
  • measures have been taken for a long time to recover the debt through enforcement action and the customer's financial situation has weakened permanently so that it will not be possible to recover the debt in the future either, or
  • carrying out the recovery would be unreasonably costly relative to the amount being recovered.

Waiving a recovery is possible on Kela's or the customer's initiative. The customer is informed about the waiver. Waiver of a recovery is always decided on by Kela's Overpayment Recovery Centre.

Waiving recovery of student loan in the case of death

Collection of student loan debt is waived upon death. If the student loan is being collected by Kela, Kela is notified of the death automatically and informs the estate of the decision to waive collection.

If the student loan has not been transferred from the bank to Kela for collection, Kela pays the loan to the bank and informs the estate of the waiver.

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