Student financial aid reform remains cold comfort

The Student Union of the University of Vaasa VYY has commented on the Government’s bill to change legislation around student financial aid. The reform aims to enable full-time studying and support graduating in target time. However, VYY states in its comment that the bill’s proposed actions completely conflict with these goals.

The proposed changes will not fix the problem

VYY considers the proposed changes unable to fix the basic problem of student subsistence: student financial aid does not cover the true costs of studying and living. 

“Students must have sufficient monetary support to focus on completing their degrees. Subsistence supports wellbeing during studies and after them in working life”, emphasizes Chair of VYY’s Executive Board, Heidi Elers. 

Students’ subsistence has already faced significant cuts, and students in Vaasa have especially suffered from changes to housing benefits. VYY demands that the housing supplement become index-linked and that the municipality ranking of housing benefits be updated to match the current market conditions. Otherwise we risk inequality in student subsistence based on study city.

Tight restrictions do not support graduating in target time

VYY criticizes the Government’s bill for its excessively tight restrictions. The proposed restrictions to the amount of months students are eligible for financial aid further rigidify studies. That months of student financial aid run out does not mean that the students’ need for support disappears, and students are then forced to apply for other benefits. At worst, the situation can lead to dropping out or renouncing their right to study, which completely impairs the Government’s goal to raise the number of young adults with higher education degrees.

In addition to these restrictions, the bill would make student financial aid even more dependent on student loans. VYY points out that the student loan already makes up around 60 % of students’ daily budget and that the amount of student loans has tripled in the last ten years. Debt weakens the accessibility of higher education and increases inequality based on socioeconomic status.

VYY emphasizes raising the monetary aid as a solution. The Student Union considers any positive changes in the bill minimal in effect, as students will be forced to take out more loans, and not even graduating within the required time will save students from these cuts. If graduation is delayed due to health concerns or employment, additional debt does little to speed up studies but has a massive impact on financial insecurity.

Financial insecurity slows down studies

The proposed changes do not improve student subsistence. According to VYY, a system based on student loans is unsustainable, and it transfers the responsibility into students’ personal debt.

“This student financial aid reform does not fill the existing gap, it cements it”, says VYY’s Executive Board member responsible for municipal policy, Mimmi Eskelä. “An even bigger debt increases financial insecurity for young adults, and it has negative consequences for their careers, starting a family, and having the courage to become entrepreneurs.”

VYY notes that the Government bill lacks in impact assessment. It does not account for the accumulated effects brought on by already realized cuts. Further, the impact assessment only reaches 2030, even though the effects of financial insecurity and indebtedness only show in the long term.

VYY says that Finland’s vitality, high level of education, and acquisition of a skilled workforce require students to have the peace and resources to focus on studying. That is where this reform falls behind.