Kela claims students 37 million euros in study aid received improperly

The Finnish social security institution (Kela) is trying to recover 37.3 million euros in study grants unduly paid to students during 2018. A total of around 308,380 students received financial aid from the state in 2018, but 43,308 of them had income in excess, according to the annual income limit specified in the Act on Student Financial Aid.

Kela informed in a news release that has recently sent out preliminary decisions on the recovery of overpaid financial aid to the affected students. The total amount of financial aid proposed to be recovered under the preliminary decisions is 37,3 million euros, and the average amount that students are required to pay back is 860 euros.

Last year Kela sent out repayment proposals to 39,777 students, while the total amount recovered was 43.3 million euros. The number of students who were sent a preliminary decision increased by more than 3,500. At the same time, the amount of financial aid being recovered decreased because the majority of students were in autumn 2017 transferred from the student housing supplement scheme over to the general housing allowance scheme. The current round of income monitoring does not apply to general housing allowance payments.

Annual income limit raised in 2020

The annual income limit varies according to the number of months for which a student takes out financial aid. Students who in 2018 took out financial aid for nine months can have earned other income of up to 11,973 euros in that year.

The income limits were raised by 4.5% at the beginning of 2020. The annual income limit is now 12,498 euros for students who get financial aid for nine months.

Information on what portion of a student’s income in 2018 was earned during periods of active study is not yet available to the Social Security Institution.

"If the reason for exceeding the annual income limit is income earned not during periods of active study but for example after graduation, the overpayment debt may be reduced or waived altogether," Kela says.

File a review request

Students can file a review request in which they should provide details of their studies and specify when the income was earned. The deadline for filing a review request is 19 March 2020.

Students must provide details of their studies and when they earned their income if they started a course of study, graduated or used up their maximum financial aid entitlement during 2018. In previous years, about one quarter of those who were sent a repayment proposal were new or graduated students.

The preliminary decision contains instructions for how to file a review request or agree on repayment arrangements.

National incomes register

In the future, Kela will use the national incomes register (tulorekisteri) to carry out income checks on financial aid recipients. Kela can use the incomes register to check whether the income in excess of the annual limit was earned outside the period of active study. Students will no longer have to provide Kela with details on when they earned their income.

The incomes register will first be applied in the income monitoring round for 2019, which Kela will carry out in 2021. The incomes register could not be used for 2018 incomes because it did not begin to accumulate data until the beginning of 2019.