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What were students left with after the government spending limits discussion?

08.04.2016

Let’s start with the good:
- Students will be covered by general housing allowance
- The cuts to student aid were decreased by 23 million euros
- The interest rate on the recovery of student aid will be halved from 15% to 7.5%
- The government guarantee for student loans will be increased to 650 euros per month
- The income limits of student aid will be linked to the wage-level index
- The study credit requirement does not increase but instead remains at 5 credits per month
- The two-tier system is abandoned and flexibility is increased compared to Uusitalo’s proposal
- 105 million euros will be invested on education, higher education teaching and young researchers in a manner to be decided at a later date

Then the extremely bad:
- Almost one fourth of student aid, 122 million euros, will still be cut
- Study grant for higher education students is reduced from ca. 336 euros down to the level of study grant for secondary education, 250.28 euros per month
- The maximum eligibility period for student aid per degree is decreased from 50 to 48 months
- The maximum eligibility period for student aid as a whole is decreased from 64 to 54 months
- Student loan compensation remains only as economic provisions allow, that is, only to the extent that retaining it is possible
- A total of 420 million euros will still be cut from education
- The pharmacy compensation worth around 29 million euros will be cut from the University of Helsinki all at once
 
Sipilä’s Government met on Tuesday 5 April to decide on the direction of central government finances in the government spending levels discussion.

As per last autumn’s Government Programme, significant cuts amounting to 420 million euros will be made to higher education. The Government set a long-term goal to save 150 million euros from student aid – corresponding to around one fourth of higher education students’ student aid. Professor Roope Uusitalo was invited to prepare a proposal on the reform, and you can read more on that proposal here and in a nutshell here.

In the spending levels discussion, the Government listened to the students’ worries and criticism and made a small concession: the total amount to be cut from student aid is to be 122 million euros. At the same time, the Government retained the study credit requirement at its current level and softened the reductions Uusitalo had proposed to the number of months for which student aid can be granted. Although these small concessions are overshadowed by the massive total cuts, they are still essential for students’ subsistence.

The Government decided to begin preparations for transferring students from the student aid’s housing supplement over to general housing allowance. HYY has been working towards the same goal throughout the winter by lobbying Helsinki-based Members of the Parliament and their special advisers. We are pleased with this decision and hope it is the first step towards basic income.

The general housing allowance is a better system than the student aid’s housing supplement in terms of the very different rental costs between different cities where higher education is offered. As such, it improves equality between students. Particularly for students in Helsinki and the Capital Region, the general housing allowance is a considerable improvement to subsistence when it comes to housing benefits.

Nonetheless, our advocacy work continues. HYY’s next goal is to get general housing allowance changed so that it becomes individual-based, that is, to have it be nondependent of the income of your partner or anyone else living in the same household. Additionally, the transfer of students over to general housing allowance must, from now on, be prepared in close cooperation with student organisations.

HYY and other student organisations have worked hard through the winter and spring to get the cuts to student aid cancelled or at least minimised as well as to influence how the potential cuts are targeted.

– We are happy to note that the Minister of Education and the ruling parties listened to the students’ worries and wishes and made several positive changes to the cut package on student aid instead of pushing through the model proposed by Professor Uusitalo in February as is. Student organisations are the best experts on student subsistence, and we hope that we will be included in the preparatory work in the future, Chair of HYY’s Board Susanna Jokimies states.

However, the concessions made in the government spending limits discussion do not change the fact that the cuts to student aid are historically large, almost one fourth of the student aid.

Even though the maximum amount of student aid available for students will increase after the increase in the government guarantee for student loan, the shift towards a strongly loan-oriented student aid is a significant ideological change. Loan-based student aid will not make students graduate faster in the way the Government hopes it will. Instead, it will make it harder for students to focus on their studies full-time. Those students who refuse to or do not have the option to get into debt for their studies will have to work more alongside their studies in the future – and will consequently take more time to graduate.

In their statement on 6 April, the Finnish Union of University Professors and the Finnish Union of University Researchers and Teachers also remarked that equal opportunities to get educated has always been the strength of the Finnish educational system. The significant cuts to student aid as well as the increase in the share of student loan within student aid both go against this basic principle.

– Loan-oriented student aid encourages students to work or forces them to get into debt. This does not have the effect on students’ graduation that the Government hopes it does. Instead, it will slow down their studies as they have to take on more work, Susanna Jokimies points out.