Indebtedness or at Risk of Poverty? University Students and Social Assistance in Finland

Abstract

This thesis examines the subsistence of students, student poverty and the predictors for social assistance application among university students in Finland. The aim is to answer the following research question: What factors are related to applying social assistance among university students? To achieve an answer, I apply quantitative methods such as logistic regression analysis for the selected data from the University Students’ Livelihood Survey 2021. The topic is also extremely relevant since reforming social benefits and finding spending cuts are on the Orpo’s Government Agenda, and these cuts will also have an impact on students as well. This study relies both on understanding poverty reduction and poverty in addition to the Finnish social security system available for students. For instance, welfare state theories and poverty scholars have identified poverty reduction as one of the key tasks of a Nordic welfare state which can be done by providing a level of subsistence for its residents through social benefits when employment is not an option. For students, the primary benefits are student benefits: study grant, student loan and the common housing allowance. If the primary benefits or employment are not enough, an individual can be entitled to social assistance which is the benefit of the last resort and sets the minimum level of subsistence. Yet, a university student must take out their student loan to be eligible for social assistance. If they do not obtain the loan, they are at risk of falling into extreme poverty. Moreover, there is a requirement for indebtedness. The prior research and statistics about social assistance beneficiaries helped with the scope of the analysis by identifying 7 independent variables such as age and receiving student benefits and 1 constant variable whether a university student has applied for social assistance during the past 12 months. The results, then, present several intriguing findings. They confirm the role of student loans as a significant predictor but also that those students who choose not to take the loan despite being eligible for it have higher odds of applying for social assistance. Younger university students are also more likely to apply for social assistance, and Swedish-speaking students have twice as great odds for social assistance application than Finnish-speakers. Being financially independent from one’s family also increases the odds of applying for the benefit compared to a university student dependent on their family’s support. Additionally, a university student who lives with a partner has greater odds for social assistance application than their single-dwelling counterpart. Some of the results can be explained by peculiarities of the chosen data such as severe class imbalances or a big representation of Swedish speaking survey participants. Other findings reconfirm the life-cyclical nature of student poverty which has indebtedness in its core. This thesis also aligns with prior studies for calling out clarity and the need for clarity regarding the subsistence of students.