Student loan debt continues to be a pervasive problem in Finland, with young students in particular facing financial difficulties. In the past decade, student loan debt in the country has more than doubled.
In 2017, the Juha Sipilä administration introduced a student financial aid reform, which included measures such as reducing the tuition fees of university students to about 250 euros—the same as that of secondary school students.
Petri Laaksonen, Chairman at the Student Union of the University of Jyväskylä, told Yle that since the reform, financial aid for students has become more loan-oriented.
Authorities have cut back the number of months for which students are eligible to receive support and scholarship funding has been reduced.
The reform has been criticised for driving students further into debt while they complete their studies. If a student is not shown to be gainfully employed, their monthly income consists of the 250-euro study grant, along with housing support of maximum 400 euros.
Student welfare representatives point out that housing costs for students are fairly high on an average, especially in widely populated cities such as Helsinki, and students struggle to remain afloat due to insufficient funding. As per a survey in 2019, one in four students was compelled to borrow money from a friend due to financial troubles.
Banks in Finland currently offer students six-month loans of upto 3,900 euros. Most opt for these instead of monthly installments. Consequently, a large number of students—especially secondary vocational school students—are unable to manage their finances effectively across the given time.
The Ministry of Education and Culture is currently considering making changes to the reform, including prohibiting six-month loans for secondary school students. It has also proposed loan relief for students due to the ongoing pandemic.