Students at the University of Helsinki. LEHTIKUVA
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More students in Finland received student loan interest assistance in 2024 than ever before, with the number of recipients doubling compared to 2023. Rising interest rates and increasing student debt levels have significantly increased demand for financial relief.
Over 16,000 students benefited from interest assistance in 2024, a figure not seen since the economic depression of the 1990s, according to Ilpo Lahtinen, Special Coordinator at Kela’s Student Financial Aid Section.
The rise reflects growing financial pressure on graduates, who often face difficulty securing stable employment immediately after finishing their studies.
Interest assistance is available to students whose income falls below a set threshold once their loans begin accruing interest, typically one year after their last financial aid payment. If granted, Kela pays the interest on the state-guaranteed student loan and the bank’s notification fees for six months. The assistance does not need to be repaid to Kela, but the student remains responsible for repaying the loan itself.
The total amount of interest assistance paid in 2024 was €9 million, up by more than €6 million from the previous year. The average assistance per recipient rose to €553, compared to €355 in 2023, reflecting both higher interest rates and larger student loan debts. Students who completed a master’s degree in 2023 graduated with an average student loan debt of €23,800.
Lahtinen emphasised the importance of interest assistance in supporting new graduates during periods of financial uncertainty. He encouraged students struggling with loan repayments to check their eligibility for the programme.
Kela provides interest assistance either directly to the customer or to the bank. Applications for assistance covering the second half of 2024 must be submitted by 28 February 2025, while the deadline for assistance covering the first half of 2025 is 31 August 2025. If assistance is paid directly to the bank, applications must be filed by 5 June 2025 for the first half of the year and by 5 December 2025 for the second half.
Lahtinen noted that Kela hopes to update the interest assistance programme to allow direct payments to banks in all cases. He pointed out that the current system, which requires semiannual applications, does not align well with monthly interest payments, forcing students to cover costs upfront before applying for assistance. Kela has proposed adjustments to better match the timing of payments with students’ financial needs.
HT
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Source: www.helsinkitimes.fi
