Student loan tax deduction

If you take out a student loan while in higher education and you complete your degree within the target time, you may be eligible for a student loan tax deduction.

The student loan tax deduction means that as you make payments on your student loan to your bank, you get to deduct the amount of the student loan tax deduction from your taxes. The deduction is only available to higher education students who began their first course of study in higher education before 1 August 2014.

Eligibility

You are eligible for student loan tax deduction if you meet all of the following requirements:

  • you began your first course of study in higher education before 1 August 2014
  • you complete your degree within the target time and
  • you have outstanding student debt of more than EUR 2,500.

Degrees which qualify you for the deduction are:

  • bachelor's and master's level university degrees
  • bachelor's or master level degree obtained in a university of applied sciences.

You only get the deduction for the first degree you complete, provided that you began the degree programme between 1 August 2005 and 31 July 2019. The student loan tax deduction is available for a bachelor's degree only if you gained admission to the bachelor's programme exclusively.

Most graduates receive a written decision on the student loan tax deduction automatically. If you have completed a degree outside Finland, you must notify Kela.

Use this calculator to see whether you qualify for a student loan tax deduction.

You must complete your degree within a target time

You only get the student loan tax deduction if you complete your degree with a specified target time. The target time depends on the degree you are studying for.

Kela considers your period of study to begin at the beginning of the term when you first accept a place of study in any higher education institution.

  • always 1 January during the spring term (1 January - 31 July)
  • always 1 August during the autumn term (1 August - 31 December)

The period of study ends on the last day of the term in which you complete a degree.

  • always 31 July during the spring term (1 January - 31 July)
  • always 31 December during the autumn term (1 August - 31 December)

The period of study also includes terms in which you register as non-attending or interrupt your studies.

Bachelor's + master's level university degree or master's degree exclusively: target time = standard time to degree + max. two academic years.
Extent of the degree programme in credits  Target time
300 7 academic years
330 7.5 academic years
360 8 academic years

If you complete a master's level university degree exclusively, the target time depends on the combined extent of the bachelor's and master's programmes.

Example

A student completes a 120-credit master's degree in a university. She is entitled to a student loan tax deduction if she completes the degree in 7 academic years (120 cr + 180 cr = 300 credits, resulting in a target time of 7 academic years). The time taken to complete a degree is counted from the beginning of the term in which the student accepted her first place of study in any institution of higher education.

Degree earned in a university of applied sciences or bachelor's level university degree: target time = standard time to degree + max. one academic year.
Extent of the degree programme in credits Target time
180 4 academic years
210 4.5 academic years
240 5 academic years
270 5.5 academic years

Keep in mind that the time to complete a degree is counted from the beginning of your first course of study in higher education and that any terms in which you are non-attending or interrupt your study count towards the time to complete a degree.

Example

A student accepts a place to study in a university of applied sciences in autumn 2008. She registers as non-attending for the academic year 2008-2009. In academic year 2009-2010 she studies in the university of applied sciences. In autumn 2010 she begins to study in a university. On 20 October 2015 she earns bachelor's and master's level university degrees comprising a total of 300 credits. According to Kela's calculations, she studied between 1 August 2008 and 31 December 2015, or for a total of 7.5 academic years. She does not qualify for a student loan tax deduction.

Extension of the target time

If you do not complete a degree within the target time, you may still be eligible for a student loan tax deduction if there is an acceptable reason for your failing to meet academic progress requirements. Such acceptable reasons are

  • performing conscript, alternative or voluntary military service
  • looking after your child, provided you were paid maternity, paternity or parental allowance
  • a period of illness,  provided you were paid sickness allowance  or rehabilitation subsidy, pension or compensation on grounds of full incapacity for work.

The period of service or payment of an allowance must be uninterrupted and last at least one month during a period of time which qualifies for the student loan tax deduction.

Example 1

A student completes a 240-credit bachelor's degree at a university of applied sciences. If the student completes the degree in 5 academic years, he or she is entitled to a student loan tax deduction. If the student accepted the place of study in autumn 2013, any justifiable reasons for extending the target time will be taken into account only for the period 1 August 2013 to 31 July 2018.

Example 2

A student completes a 300-credit bachelor's degree at a university. If the student completes the degree in 7 academic years, he or she is entitled to a student loan tax deduction. If the student accepted the place of study in autumn 2013, any justifiable reasons for extending the target time will be taken into account only for the period 01/08/2013 to 31 July 2020.

The student is performing conscript service in autumn 2014 and spring 2015 with the result that the target time for qualifying for a student loan compensation can be extended by one academic year. The degree must be completed by 31 July 2021.

The student falls ill during spring 2021 and receives sickness allowance payments for at least a month. The target time can be extended by 0.5 academic years. The student will qualify for a student loan compensation if he or she completes the degree by 31 December 2021.

A period of service or payment of an allowance lasting at least one month during a single academic term extends the target time by 0.5 academic years. Term dates are 1 January - 31 July and 1 August - 31 December. The target time cannot be extended by more than 0.5 academic years even if you have had several periods of service or payment of an allowance during a single term.

If the period of service or payment of an allowance lasts at least one month, but not within any individual term, the target time can still be extended by 0.5 academic years.

The target time can be extended without limit because of child care responsibilities. For any other reasons, the target time can usually be extended by a maximum of two academic years.

If you exceed the target time, you will receive a preliminary decision Kela telling you that you are not granted a student loan tax deduction. If you have an acceptable reason for taking longer than the target time, you can ask Kela to review your case again.  The preliminary decision will give you the deadline for requesting a review.

Example

A student who has graduated with a degree receives a preliminary decision denying her a student loan tax deduction. With a total requirement of 300 credits, the bachelor's and master's degrees should have been completed in 7.0 academic years, but the student took 7.5 academic years to graduate. Because she had a child while she was a student, she decides to ask for a review of her case. Kela checks that the student received maternity and parental allowance payments between 27 February and 11 January. The time to degree required to qualify for a student loan tax deduction can be extended by one academic year. She qualifies for a student loan tax deduction.

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