Have you applied for a student loan already? If not, what are the reasons why you haven’t? In my case, before I started studying I announced that I would never take out any loan during my studies, because I didn’t like the idea of getting into debt before graduating. Somehow my perspective changed while I started studying, working and living on my own at the same time. So far, I haven’t regretted anything, so why should you?
Here I’ve collected a few reasons what might affect your decision to apply for a student loan, as they did to mine.
You will get “free money”, if you graduate on time
If you have started your studies 1.8.2014 or after that, Kela (The Social Insurance Institution in Finland) will compensate 40% from your loan that exceeds 2500 (at the moment). For example, if you withdraw 6200€ of loan, Kela will compensate 40% of 3700€, which would be then 1480€. You’d need to pay only 4720€ anymore back to your bank, and the amount of compensation, the “free money” would be 1480€. Logical? The only requirement for you is to graduate on time, otherwise Kela will not compensate anything.
You can spend it on almost anything you want, travelling, investing, living…
No one has defined that you can use your student loan only on studying. As long as you graduate on time and pay your student loan back in terms you have agreed with your bank, you can do almost whatever you want with the loan. For example, if you are good at investing your money in stocks, you could give it a try and invest maybe a part of your loan and see if it yields you any profit.
A bit more common investment could be ASP (home saver’s bonus interest account). You could invest your student loan in your ASP account, and while working very hard at school, you could increase the money amount in your ASP account. What could be way an easier way to save money for your first own home?
Of course the most usual way to use the student loan is for living costs. Some students might have a high rent in their apartment, they might not have a part-time job chance or just don’t want to eat noodles and macaronies 3,5 years in a row. Some might even use the student loan to traveling or interrailing, which are great ways to get some new experiences and meet new people all around the world, even while they are studying. So why wouldn’t you even consider?
The Government is cutting down 150 millions euros of study grant
Yes. The Government decided in spring 2016 to cut down from students, from the future taxpayers. I understand that government has to cut down from somewhere, but are the students really the most important section to cut? Every student might not have an opportunity to work during the studentship, so cutting study grant from them might slow down their studies. If those students live also with their partners, boy- or girlfriends and their partner graduates earlier and starts earning money, their study grant is cut down even more. Fair? If you live with your partner, and he/she starts making money in their job, you might need the student loan, unless you don’t have a job or want your partner to pay your share of the rent every month.
So if you’re worried about getting into debt before you have even graduated, or you have already a mortgage and don’t want to end up in more debt, think student loan as a back-up plan. You can apply for it anytime you want, during your studies of course and raise the exact amount You prefer. Kela will compensate 40% of the amount that exceeds 2500€, and that is quite a lot.