Cuts aimed at students undermine the future of Finland

Orpo’s government is making drastic cuts to students’ subsistence. For too long, students have been pushed to the limits of their endurance. We just want to graduate while still retaining our ability to work and without having accumulated a massive debt burden.

The government’s plans to make cuts to the study grant and general housing allowance hit already overburdened students especially hard. The financial situation of students has been declining especially due to the rapid rise of loan interests and prices.

According to the Students’ City study of 2023, the average net income of students in the Capital Region is only 1,268 euros per month, while 39% of them have had to refrain from buying food and/or medicine due to insufficient funds. (The study by the Research Foundation for Studies and Education Otus will be published on 3 November 2023.)

The response by Orpo’s government is to force students deeper into debt. The government proposes increasing the amount of student loan by 200 euros to 850 euros per month. The student loan stock is currently already over 6 billion euros. In January 2023,  the total amount of loans taken out was higher than ever before during a single month. If the proposed changes go through, the average debt burden of higher education students is estimated to rise to over 30,000 euros.

Students’ worries over getting into debt are not unfounded. It is consequently no wonder that students have been demonstrating by occupying universities and other educational institutions in an unprecedented way. The occupations have been the students’ cry for help to the government.

By July this year, Kela  has already paid banks 42 million euros on behalf of insolvent students. At this point, the sum was already 11 million euros higher than during the entire previous year.

Increasing the emphasis on loans in student aid will likely increase the number of students who will not be able to pay back their debt. According to the Guarantee Foundation, the debt problems of people under 30 years of age have increased very quickly during the past five years.

According to the 2023 evaluation report on the adequacy of basic social security, out of all recipients of student aid, students taking out student loans experienced the worst development of their income during the evaluation period 2019–2023. It is likely that students taking out student loans will continue to struggle with their subsistence in the future, too. The rising indebtedness will be affecting decisions related to starting a family or buying a first home, for instance, far into the future.

The cuts proposed by Orpo’s government are a way of shifting the costs of education from society to individuals, which decreases the accessibility of education. Lowered incomes will also further increase the inheritance of higher education. It will be considerably more difficult than before for people with lower  socioeconomic status to seek higher education.

The government’s austerity measures are not compatible with the government programme’s goals to make students graduate quickly and to raise the overall level of higher education.

The government justifies the cuts aimed at students by them helping younger generations avoid the burden of national debt. This is a glaringly clumsy excuse considering that the government is still willing to cause unreasonable increases to the personal debt of young people. In addition to personal debt, the government’s cuts to climate action and health services are also piling up both mental health and climate debt on young people.

Making cuts to the already low incomes of students will greatly undermine student wellbeing. This amounts to knowingly exposing students to burnouts. At the same time, it also reduces students’ chances of graduating in target time while retaining their ability to work.

Linnéa Partanen

Member of the Board in charge of subsistence