Income of higher education students
As a student, student financial aid will be your primary source of income. If necessary, you can also receive a housing allowance and basic social assistance. If you fall ill for a longer period of time, you will be entitled to a sickness allowance.
If you have a job at the time of your studies, you will pay taxes for your salary. Your study grant will affect the tax rate for your salary.
As a student at an institution of higher education, your primary source of financial support will be student financial aid from Kela. Apply for student financial aid immediately after accepting a study place and notifying your educational institution. Submit your application on time, as you cannot receive student financial aid retroactively.
The amount of the student financial aid and the length of the aid period will vary depending on your studies and life situation. Student financial aid includes a study grant, a state guarantee for your student loan and a housing supplement. A housing supplement is only granted in certain cases, for example to students living abroad.
Where necessary, you can also apply for a general housing allowance from Kela. A housing allowance and student grant will not have an impact on one another, which means you can receive these simultaneously. A housing allowance is intended for people with a small income to subsidise their housing expenses. The amount of housing allowance one is entitled to depends on their housing costs, the total monthly income of all people living in the same residence and the municipality in which the residence is located.
If you do not have enough money to cover basic living costs, you can apply for basic social assistance from Kela to cover your essential daily expenses. However, social assistance is a final resort. You must primarily rely on a study grant, a student loan, housing allowance, earnings and other benefits and income. As a student, you must also apply for a student loan before applying for social assistance.
Sick leave that lasts less than two months will not impact your student financial aid, even if you are unable to complete the necessary amount of study attainments during this time. However, be prepared to give Kela additional information on your illness and the progress of your studies.
If you must interrupt your studies for more than two months because of an illness, you should apply for sickness allowance from Kela. This will ensure that your allocated study months will not go to waste. However, you can receive student financial aid until you begin to receive a sickness allowance.
Please note, that you cannot receive student financial aid and a sickness allowance at the same time.
If your student financial aid has been terminated, apply for it again when you can continue your studies full time.
The salary you receive for employment will affect how many months a year, you can receive a study grant.
Ask Kela for your annual income limit. The limit is based on the number of months you receive a study grant over the course of the year. This will help you keep track of the salary and other income you can receive during the year, before you have to return your study grant. Please note that Kela will check this by calendar year not by semester. Your summer job salary will be included in your annual income.
Keep a journal of your income during the year, so that you can assess how much you can work. If you notice that you may exceed the annual limit, cancel your study grant in advance. If you have already exceeded the limit, return the study grant you have received to Kela at your own initiative.
If you exceed your annual income limit and do not do anything about the matter, Kela will recover the money from you with interest. You will also not be able to utilise the financial aid months for which money has been recovered at a later time.
Your income will also affect your housing allowance and basic social assistance. However. it will not have any impact on your student loan.
You do not need to pay any taxes for housing allowance or basic social assistance. A study grant is also tax-exempt if it is your only source of income. If you also have other sources of income, a study grant will impact the tax rate you must pay on your earnings.
You should estimate your taxable income for the whole year and add it to the study grant paid to you during the year. If your income and study grant exceed the income limit specified on your tax card, you should order a new tax card from the Finnish Tax Administration’s MyTax online service. Remember to keep a close eye on the income limit specified on your tax card during the year so that you do not need to pay additional taxes.
If you have been granted a sickness allowance this is taxable income. If you receive grants, check each one case-by-case to determine whether you need to pay taxes on them.
Kela may pay back part of your student loan if you complete your higher education studies within the targeted time. The student loan compensation paid by Kela may be up to one third of your student loan. It can mean a reduction of more than 6,000 euros and if you have taken a higher education degree in a foreign country, you may save up to 12,000 euros.
You are eligible for student loan compensation if you have started higher education studies in autumn 2014 or after that. As a rule, you do not need to apply for the compensation. However, there are a few exceptions and they concern Bachelor’s degrees and degrees taken outside Finland.
Remember that the study period considered in student loan compensation always starts from the beginning of the term when you accepted your first study place in any higher education institution. The terms during which you are registered as absent or have interrupted your studies are also included in your study period.
As a student at an institution of higher education, you can apply for separate grants and scholarships to fund your studies. However, please note that you will have a better chance of receiving grants at the later stages of your studies. For example, you may be given a grant to complete your thesis.
The parties that most commonly give out grants include funds and foundations. Also, municipalities, associations and companies may give out grants. In order to be eligible for a grant, the applicant must generally meet with certain conditions specified by the party giving the grant.