The Finnish Social Insurance Institution (Kela) will no longer offer a housing supplement to recipients of student aid beginning August 1, 2017.
This means that students who would previously have received a subsistence benefit as well as a housing supplement as one package will have to cover their housing costs by applying separately for general housing aid.
Once the reform kicks in, as many as 50,000 students at institutes of higher learning will thus receive no government allowance to help them cover their rents unless they apply separately for general housing assistance.
However, student organisations say the new system is likely to be more even-handed than the somewhat untenable one it is replacing.
"The housing supplement that currently forms part of overall student aid is definitely inadequate," says chair Riina Lumme from the Turku University student union. "It's only a couple hundred euros, which is nowhere near big enough to cover more than a portion of most people's rent."
Lumme says that her student union's board has its work cut out for it thanks to the reform. Students will flock to the unions for information on how to navigate the new two-tier benefit system, without which few would be able to study full-time.
On the whole, Lumme says the change is positive.
"Those who have higher rents will also now receive more assistance, which is currently not the case. The aid will be more evenly dispersed based on what students pay in housing," she says.
Students themselves are cautiously positive about the future of their subsidies. During the previous elections then-Finance Minister Alexander Stubb and Prime Minister Juha Sipilä both vowed that student aid would not be cut – a promise that has since been broken.
"We hope that decision-makers would understand that education is not the right place to make cuts," says Lumme. "Especially after the huge ones they implemented over these two terms."
Loan the same as aid?
Chief coordinator Ilpo Lahtinen from the insurance institution says that students should consider the government-backed student loan a significant part of their subsidy.
"Students may be losing some 200 euros in housing supplements, but the maximum loan they can take will increase by 250 euros," he says. "If we look at the student loan as a part of student aid, far fewer can be said to be on the losing side."
Basic student aid will also decrease by some 90 euros per month. Lahtinen says that government debt will, in time, have to be paid off by people who are now students, and that letting the country go deeper into debt is not in the interest of students.
The problem with this picture, students themselves say, is that not everyone studying at university level feels confident about taking out thousands of euros in loans. The reason is simple.
"I'm trying to avoid taking out a loan because employment is so uncertain," Pori cultural studies student Emilia Merisalo says. "There are no guarantees that I will find employment when I graduate and thus be able to pay off my loan. I think forcing students to go into personal debt is a bad move."
Lack of information
Not only are future prospects uncertain, but students are largely unaware of the real financial impact of the coming reform. Students say that Kela is not clear enough in informing its customers of radical new changes.
For instance, says Merisalo, if a student lives together with someone who is in working life the student faces near-destitution without the ability to apply for housing allowance.
Lahtinen assures readers that Kela will put together a comprehensive info package with helpful tips for students in need of Kela aid.
"If more than one person lives in an apartment, getting separate rent agreements can make a student lodger eligible for general housing assistance," he says, although it is up to the apartment owner whether such agreements can be entered into separately.
Lahtinen admits there are many ins and outs to the new reform.
"There's a lot to take into consideration, lots of details to look at carefully," he says.