AYY issued a statement on interest subsidy amendments for student housing

Investment grant cuts have hindered the progress of new projects

Student housing construction has previously been supported in two ways: through the interest-subsidy loan and investment grants for specific groups. The investment grant has been especially important because it has helped cover the self-funding portion after the loan and ensured that rents stay affordable for students. Now the grant has been cut so much that it is no longer sufficient for student housing projects. This has halted many new projects, as non-profit organisations have been unable to cover their self-funding portion.

At the same time, students’ financial situation has worsened. Students’ shift to the housing supplement of student financial aid has reduced their housing support by up to 100 euros per month, and students no longer receive housing support during the summer. This makes paying rent more difficult and increases the need for affordable student housing.

The situation is especially challenging in the metropolitan area. In Espoo, only around 20% of students live in student housing. At the same time, the number of students has grown and is expected to continue rising. There simply isn’t enough housing for everyone who needs it.

The change is a step in the right direction, but it doesn’t solve the real problem

Increasing the interest-subsidy loan to 100% would make it easier to start new projects, but it could also raise construction costs. In other words, this change is just a bandaid, not a cure. Without investment grants, rents could rise significantly. SOA estimates increases of up to 11–12%. This is a major problem for students, whose ability to pay rent is already limited.

For these reasons, this solution cannot be permanent. Investment grants must be restored to their previous level to ensure enough student housing is built and rents remain affordable. 

AYY emphasises that investment grants and interest-subsidy loans should complement, not exclude, each other. This would provide more flexibility when investment grant levels fluctuate. In addition, rent equalisation between different properties is important to ensure housing remains affordable for everyone.

Affordable housing supports students’ daily lives

Affordable housing allows students to focus on their studies without constantly worrying about money or housing. If rents keep rising and subsidies are cut, many students will have to work more alongside their studies—which could delay their graduation.

AYY insists that student housing funding must be secured for the future. Now we need decisions that support students’ daily lives—not make them harder. 

Read our statement here.

Further information:

Sonja Naalisvaara

Advocacy and Communications Manager