Blog: There is a bleak future for students' financial security16.10.2020
The finances of a student consists of many parts. There are student loans and study grant, part-time work, and possibly savings already acquired in the past. In the spring of 2020, however, all of this changed. A pandemic that threatens not only the health of us all but also puts students in financial distress.
During the last half-year, thousands of summer jobs have disappeared from the market. Youth unemployment as well as youth’s share of the unemployed have grown significantly. The number of hidden unemployed people is also estimated to have increased by more than ten thousand within the last year, and this group of people also includes students who want to work. And even if a student has managed to get an internship despite the situation of the labor market, almost 65 % of internships at UAS are still unpaid. These statistics paint a very worrying picture of the financial situation of students and their future.
When a significant source of income is removed from the building blocks of a student’s financial security, more reliance is placed on other sources, such as study grant and student loans. In recent years, however, the amount of study grant has been reduced and emphasis on the loan has increased dramatically. What happens in a situation where a student has not even had the opportunity to increase their savings by saving a part of their summer job salaries and cannot support their finances by working alongside their studies? Even before the pandemic, there was a significant and steady long-term increase in student loans for both the number of students getting a loan and the sums of loans taken, so we can expect even more significant student indebtedness in the near future.
It is great that students made redundant in the spring were taken into account in unemployment security, and we are all extremely grateful for that. It is also possible to apply for a longer period of study grant if the studies have been delayed due to a pandemic. These decisions have saved many students from financial hardship, yet they secure only a small fraction of everything that threatens students’ financial situation.
At present, despite the possibility to apply for additional study grant time, the graduation deadline set for the student loan compensation has not been postponed. This means that even if studies have been delayed for reasons completely beyond the students' control, such as the loss of an internship or the cancellation of an assignment for a thesis, they will still lose their possibility of getting a student loan compensation. As indebtedness intensifies and livelihoods weaken, there is a strong concern about students' financial peace of mind and their financial security.
The question is: How sustainable are the students’ finances taking all of this into consideration? How are those, who did not get a job for the summer or alongside their studies, doing? What happens to those whose fixed-term employment contract unexpectedly did not get extended, or to those whose working hours dropped to near-zero?
When decision-makers consider measures to defeat a pandemic, the long-term effects of them must also be considered. Youth and students are the ones who will take care of the Finnish economy in the future. Thus, we remind everyone that investing in the well-being and financial peace of mind of young people and students is an investment for the future. An investment we cannot afford to miss.
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