Students at the University of Helsinki. Photo: Emmi Korhonen / Lehtikuva
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Thousands of students in Finland will see their housing support from Kela drop to zero in August following a nationwide policy change that removes students from the general housing allowance system.
From 1 August, students will instead receive a smaller study grant housing supplement, which only applies during months of active study. The change ends housing support during summer holidays and significantly reduces the total amount of aid available throughout the year.
The National Social Insurance Institution Kela has confirmed the transition. Students remain in the general housing allowance system until the end of July. In August, many will receive no payment at all.
The maximum housing benefit for a student living alone in Helsinki is currently €394.10 per month, amounting to €4,729.20 annually. After the change, the maximum monthly support will fall to €296 during study months only, totalling €2,664 per year. This represents a drop of 44% for those studying nine months annually.
Only students with children or a spouse with children will continue to receive general housing allowance under the current rules.
The change is expected to take many by surprise. Kela has warned that its call centres may experience high traffic in early August as students seek to understand why no support payment arrives.
Most students are unlikely to notice the impact until the first missed payment in August. The new model does not provide any support for non-study months. Kela will only begin payments again in September, and even then at the reduced rate.
According to government data, about 130,000 students received general housing allowance in 2023. The sudden change affects nearly all of them simultaneously.
The reduced support shifts a larger share of housing costs onto students. For many, the difference will be significant, particularly in cities where rental prices are high.
In Helsinki, an average studio apartment rents for about €750 per month. Under the old system, the general allowance covered over half. Under the new model, the supplement will cover less than 40% during study months and nothing in summer.
Students are expected to adjust by seeking cheaper housing. Demand for low-cost rental units is forecast to increase sharply, putting pressure on already limited supply. This could drive rents higher in the lowest price categories despite the overall downward pressure on the broader market.
Experts in student affairs and housing policy have noted that many landlords and housing investors have not yet responded to the incoming change in demand patterns. The full effects are likely to become visible during the autumn term.
The August change also removes the income-testing of cohabitants for housing benefit eligibility. As a result, shared living is expected to grow more common. Students may increasingly choose to live in larger flats with others to reduce individual rent costs.
In practical terms, a shared apartment could allow a student to live in a more central or expensive location at a lower personal cost than a studio under the new support structure.
Kela has not published specific outreach plans to inform students of the upcoming shift. Advocacy groups have warned that awareness remains low, particularly among continuing students.
New university entrants in autumn 2025 will likely factor the support change into their housing choices. Existing tenants may not act until the financial impact becomes clear in August.
The Finnish Ministry of Social Affairs and Health, which oversees Kela, has not commented on potential revisions or phased implementation to soften the impact.
HT
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Source: www.helsinkitimes.fi
