While the focus of the government's draft budget presented on Wednesday is on helping consumers deal with rising prices, it also contains a scheme to help another financially-strapped segment of the population – students who are wrestling with the debt incurred to finance their studies.
Even though tuition is free and study stipends are granted by the government, many students still take out student loans to cover extra living expenses.
According to figures from the Social Insurance Institution Kela, the average student loan debt during the 2020/2021 academic year was just slightly more than 10,000 euros.
In June of this year, Ilpo Lahtinen, a planner at Kela's student aid group told Yle that there are more than 10,000 people with a student loan debt in excess of 30,000 euros.
Regional focus
The government's new plan calls for a student loan credit, in practice partial loan forgiveness, to be provided to new graduates who take up jobs in some eastern and northern parts of the country.
"This is absolutely the best thing. This has been attempted for 25 years and now it is starting to come true. We've begun to recognise that the whole country should be inhabited. In the future, the labour shortage will also ease," says MP Hanna Huttunen (Cen), who chairs the parliamentary working group for sparsely populated areas.
According to MP Johanna Ojala-Niemelä (SDP), the vice-chair of the same working group and the chair of Parliament's chairman of the Constitutional Law Committee, the details of the scheme and more precise figures on repayment benefits will be agreed upon as the government fine tunes its budget proposal.
The Finnish pilot programme will be drawing on a Norwegian model, where those who finish their studies can get up to a ten percent annual reduction in their student loans if they work in Finnmark or north Tromsø.
25 municipalities
A preliminary survey by the University of Eastern Finland of the regions to be targeted by the debt forgiveness trial lists 25 municipalities.
In Lapland, the locales listed are Savukoski, Pelkosenniemi, Salla, Kemijärvi and Posio.
In North Ostrobothnia the proposed municipalities are Kuusamo, Taivalkoski, Pudasjärvi, Utajärvi, Vaala and Pyhäntä.
All of the municipalities in the Kainuu are listed - Suomussalmi, Puolanka, Hyrynsalmi, Ristijärvi, Paltamo, Kajaani, Sotkamo and Kuhmo.
In North Savo, the municipalities Sonkajärvi and Rautavaara are included, as well as Nurmes, Juuka, Lieksa and Ilomantsi in North Karelia.
One factor common to all these municipalities is a labour shortage in a number of key sectors.
