Student at Helsinki University library. LEHTIKUVA


In a notable shift from the past decade's trend, fewer Finnish students opted to take out student loans in 2023, marking the first decline in borrowers since 2013. Despite this, the average loan amount rose, continuing a pattern of gradual increases over the years.

A total of 174,685 individuals took out student loans last year, nearly 18,000 fewer than in 2022.

This decline interrupts a steady increase in borrowers that Finland had seen from 2014 through 2022. Signe Jauhiainen, Head of Research at Kela (the Social Insurance Institution of Finland), attributes this downturn to rising interest rates and possibly the employment situation.

"Rising interest rates likely lead to more cautious borrowing behavior. Additionally, if students find ample employment opportunities, the need for loans may diminish," explained Jauhiainen. Despite fewer borrowers, the average loan amount in 2023 was €14,071, up from €13,399 in 2022 and €13,972 in 2021, adjusted for inflation.

Changes in financial aid policies toward more loan-based support and rising prices are influencing borrowing habits. "As living costs increase, students may find themselves needing to borrow more to cover their expenses," Jauhiainen noted.

The loan guarantee for students in Finland will increase from €650 to €850 per month starting in August of this year, allowing for higher borrowing limits. This change, coupled with upcoming adjustments to housing benefits, could lead to an increase in the amount students borrow in the future.

An interesting gender disparity in borrowing trends persists, with female students consistently taking out larger loans than their male counterparts. In 2023, the average loan amount for women was €14,383, compared to €13,656 for men. The gap between the genders has widened over the last decade, from a few hundred euros to nearly a thousand euros, and continues to grow.

The reasons behind this persistent gender difference in loan amounts remain unclear, but the trends suggest a changing landscape of student finance in Finland, influenced by broader economic factors and policy adjustments.