Govt proposes changes to student benefits from August 2027

The four-party alliance government led by the Kansallinen Kokoomus (National Coalition Party-NCP) proposed to bring changes to student benefits from August, 2026, said the Social Insurance Institution-Kela on Friday.

The government proposed that the Act on Student Financial Aid be replaced by a new Act on Student Benefits.

Changes are proposed to the terms of student financial aid, study grant, student housing supplement, government guarantees for student loans, school transport subsidy, student loan compensation and assistance with student loan interest.

If Parliament adopts the proposal, most of the changes will enter into force on 1 August 2027.

According to the proposal, supplementary allowance for the purchase of study materials will be abolished while a higher housing supplement in certain situations for persons in compulsory education will be introduced.

Students under 18 who live with their parent(s) no longer be entitled to government guarantee for student loans.

Interest on student loans will be capitalised over a longer period.

Weekend trips for students in compulsory education will be covered by school transport subsidy.

The amount of student loan compensation will depend on whether the applicant has degree within the target time or the extended target time.

The time taken into account in the student loan compensation could be extended on the basis of a medical condition.

The changes will enter into force on 1 August 2027 if the new Act on Student Benefits enters into force, unless another date is specified for any individual change.

The change to the provider supplement is intended to take effect on 1 October 2027 and the change to interest assistance on 1 January 2028.