Funding
Although higher education institutions are independent legal entities, the main funding comes from the state budget. Finland’s parliament decides the overall amount of core funding for higher education and the Ministry of Education and Culture allocates it to the institutions.
The core funding is allocated to the institutions according to the funding models. The overall aim of the core funding models is to improve the quality, impact and productivity of the higher education institutions.
The funding models for universities and for universities of applied sciences (UAS) are somewhat different, but the underlying idea is the same: funding is allocated based on the institution’s performance in providing education and research. Part of the core funding is allocated on the basis of the strategic development in institutions. In the UAS funding model, performance in education is emphasised more, whereas in the university funding model, more emphasis is put on research activities and strategic development.
University core funding is allocated based on:
- education, e.g. bachelor’s and master’s degrees and graduation times
- research, e.g. PhD degrees and scientific publications
- other policy considerations, e.g. strategic development and special national duties.
University of applied sciences core funding is based on:
- education, e.g. bachelor’s degrees and graduation times
- research and development, e.g. external R&D funding and master’s degrees
- other policy considerations, e.g. strategic development and profiling
In addition to core funding, higher education institutions also receive financing from other sources (external funding), such as the Academy of Finland, The Finnish Funding Agency for Innovation (Tekes), foundations, enterprises, the European Union and other international sources.
Financial autonomy and control
The core funding to the higher education institutions is allocated as a single entity. The institutions then decide on the internal allocation of funding independently. Higher education institutions have extensive autonomy on their activities and they have the right to make decisions on matters related to the institution's internal administration.
The higher education institutions and the Ministry of Education and Culture have mutual negotiations during the four-year agreement period. In these negotiations, institutions and ministry agree on performance targets, key measures, tasks and profile of the institution.
The Ministry of Education and Culture follows statistical data on institutions’ performance on a yearly basis. The Ministry can also give written feedback to institutions and organize discussions with the institutions’ management on specific questions.
Fees withing public higher education
Instruction is free of charge at higher education institutions for all EU and EEA citizens.
In the university sector, students in bachelor’s and master’s programmes pay a small membership fee, typically around EURO 50, to the student union every year. In return, they get meals at reduced price, health care services and other social benefits. Student union membership is optional for postgraduate licentiate and doctoral students as well as UAS students.
International students pay tuition fees. International student is defined here as citizens of non-EU/EEA countries who are studying in a bachelor’s or master’s programme taught in English. International students in doctoral programmes do not pay fees, nor do the non-EU/EEA citizens who have permanent residence permit in Finland.
By law, the minimum annual fee for international students must be EURO 1 500, but in practice, higher education institutions charge more than the minimum. Typically, the tuition fees for international students vary between EURO 5 000 and 18 000 per academic year depending on the institution and the programme. Fee is paid to the institution.
Financial support for learners' families
No specific benefits are available to parents of higher education students.
Financial support for learners
Student financial aid consists of study grant and student loan. The purpose is to guarantee subsistence during the period of study.
Students are eligible to the student financial aid if they study for a bachelor's or master's level degree in university or UAS, or a post-graduate degree in university.
Student financial aid is for full-time time studies, and beneficiaries must show sufficient progress in their studies. In higher education, they must complete at least 5 credits on average for each month of financial aid and at least 20 credits in each academic year.
Student financial aid (grant and loan) is available for a total of 48-57 months depending on the scope of the degree. Students can decide how many months per year they have.
Student’s income affects the number of months per year for which they can receive financial aid. Annual income should not exceed the specified limit.
The amount of study grant per month is EUR 254 and the amount of student loan per month is EUR 650 (in 2022/23). It is possible to combine study grant with the student loan.
Student loan is a government-granted loan that must be paid back. Once a student has been granted the government guarantee for a student loan, they may apply for the loan at a bank of their choice. As the loan is guaranteed by the government, no other collateral is needed as security. Interest rate and repayment schedule is negotiated by individual students with their respective banks. Students generally start paying off their loans within two years of the end of their studies.
Around 62% of first and second-cycle students received study grant and 44% took out a student loan in 2021/22.
It is possible to take the study grant and student loan abroad if the student:
- is completing a degree programme abroad or
- is participating in a study exchange or job training that is part of the degree course in Finland.
In addition to study grant and student loan, most students are also entitled to general housing allowance. The amount of the housing allowance depends on the income of all household members and on the housing costs.
Students are also entitled to subsidized student meals, public transportation and student health care services.
Students who take out a student loan and complete the degree within a target time are eligible for a student loan compensation. It means that state pays back part of the student loan.
Private education
Funding for all higher education institutions is determined according to the same criteria. Finnish universities and UASs are all considered to be public.