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IIRC Finland has never had university tuition fees and it is the 3rd most equal country in the world. http://www.goodcountry.org/country/FIN

Finnish students get allowance from the government for the duration of their studies (max ~60 months) and get government backed cheap loans which they start paying back after their studies.

My own experience is that there are people from very varying backgrounds in the Finnish universities.




> Finnish students get allowance from the government for the duration of their studies (max ~60 months) and get government backed cheap loans which they start paying back after their studies.

Thought experiment: American students also get government backed cheap loans. Further, since these government-backed cheap loans are often used to cover cost of living as well as tuition, they are a de-facto allowance from the government (albeit one you need to pay back after you are graduated). And yet the american education system seems to have a bunch of dysfunctions that the Finnish one does not.

There has to be other differences that cause this, it can't be the presence of cheap loans. The conventional wisdom in America is that cheap loans incentivize universities to raise tuition, because they know the money is still coming in. Why does this effect not take place in Finland?


I expect it's because of who does the bargaining. In the US, where students take out loans and then pay educational institutions with that money, the student is the one bargaining. The student has very little leverage, comparatively, and they are not incentivized in the short term to drive a hard bargain because they're going to turn around and get the money via a loan.

When the government is directly covering the cost of education, they are the ones bargaining with educational institutions. If the institution tries to bump prices, the government can pull funding for that institution and basically eliminate their revenue. As such, the institutions and government are required to negotiate much more rationally.


As I understand, in Finland universities are not private so there is no "negotiation between the state and the universities". Also, there is no tuition and students get stipends from the government while studying and can additionally take cheap loans if they need more income for their expenses.

The question should not be "what is different between the systems?" but "what, if anything, is similar?".


There's some misunderstanding - the student loans in Finland and a few other places are only for student living expenses (food/rent/beer/whatever) during the studies so that they don't have to work to support themselves during studies; they do not affect the budget of universities in any way.

If the university finances are decoupled from student ability to pay, then loan availability doesn't distort the education institutions, but instead mainly affects the lifestyle of students and their families.


Monthly allowance (around 400-500EUR in total) and free university education (classes and labs are free, you have to buy or loan the books) are the main characteristics of Finnish university system. Student loans play only a small part. Many people in my student generation didn't even take them, even if they are more or less risk free loans.


He just said there is no tuition cost in Finland so that is why it does not take place in Finland.




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