The cornerstone of unity

45 FINANCIAL AID FOR STUDENTS 
The history of Finland’s student aid system can be divided into four periods. During the first, which lasted until 
1969, government aid represented only a small part of the income students needed to pay for their living 
expenses. The governme
nt’s loan interest subsidies, loan guarantees, and scholarships were only intended for 
needy students. The living expenses of most students had to be almost exclusively covered by money that they 
earned themselves and that they received from their parents and others close to them.
The second period of student aid, from 1969 to 1977, was characterized by government-backed loans. The 
previous scattered aid and scholarship systems were combined into a comprehensive student aid system that 
gave all students the right to apply for and get a student loan. From this time dates the idea of student aid being 
a universal entitlement for everyone who has been accepted as a student, though the role of the state at the time 
was still small and consisted only of backing the loans and subsidizing their interest rate. When the state took on 
the role of loan guarantor, this established the concept of each student’s strong own responsibility for their living 
expenses during their studies.
The third period of the student aid system, from 1977 to 1992, is remembered as the time when 
government support was continually expanded. Student aid was still mostly in the form of loans, but the 
conditions for receiving student grants and what they covered were extended, and housing aid and meal 
subsidies were added to the student grants.
From 1992 to 2017, the emphasis in financial aid was on student grants. The 1992 reform of the student aid 
system changed it completely. Student grants almost tripled in size, and bank loans with government-subsidized 
interest rates were replaced by commercial bank loans. Simultaneously, a lot of previous outgrowth was trimmed, 
including the allowance for students’ children and the effect of the income of university students’ parents and 
partners on their financial aid. In 1992, the student grant constituted for the first time a larger share of student aid 
than the government-backed loan.
Since the major reform of 1992, the elements of student aid have not changed, but the student aid system 
has been subject to political whacking in a most peculiar way. Merely since 2000, several dozen amendments to 
the Act on Financial Aid for Students were adopted. The amendments have made the legislation complicated, 

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which has made its implementation difficult and has weakened the social (economic) security of students. Due to 
the continual changes of the student aid system, it has not been possible to evaluate the effects of individual 
amendments, which has made impact assessments of the decisions on student aid more and more unreliable 
and one-sided. 
Finland’s centennial year 2017 will be pivotal for the Finnish student aid system. Starting in August 2017, 
students will once again be offered significantly more aid as a loan than as a grant. Simultaneously, they will 
face the biggest change in the student aid system since 1992: They will be transferred from their own housing 
supplement system to general housing assistance. The objective of this change is to respond better to increased 
rents and to guarantee students the possibility to study full time.
Student aid is dependent on each student’s fulfilment of obligations and eligibility. To qualify, students have to 
earn enough course credits, and the aid is reclaimed if a student has enough other income. The purpose of 
student aid is to enable students of all backgrounds to study full time. The combination of student aid with more 
inclusive university admission policies and with high-quality primary and secondary education has enabled a 
degree of equality in education in Finland that is among the best in the world.
About 0.8 billion euros are allocated annually to student aid in the national budget. It is very unlikely that 
reform fervours directed at the student aid system will cool after the 2017 reform. Discussions will continue as to 
whether investments in university education are investments for improving the future ofsociety or of individuals. 
Hopefully the history of the student aid system and the mistakes of the past will not be forgotten in these 
discussions.
Silja Silvasti 
– social policy adviser of the National Union
of University Students in Finland 2015 
–