Government budget cuts end universities' performance-based scholarships

In a move expected to save the Ministry of Education and Research €2.4 million annually, Estonian universities have discontinued awarding performance-based scholarships (PBS) to students with good grades as of this year.
"The decision to stop allocating funding to higher education institutions for PBS is tied to the need to cut the state budget due to the country's economic situation," explained Kristi Raudmäe, head of higher education at the ministry.
"The operational costs and subsidies of the Ministry of Education and Research were cut by €36.4 million in the 2025 budget, of which €10.1 million accounted for cuts in the higher education sector," she added.
In previous years, the PBS budget stood at €2.4 million. Approximately 2,400 students received these scholarships, accounting for around 6 percent of all university students.
According to Raudmäe, Estonia is moving toward a needs-based approach for all benefits, and this principle will also apply to student financial aid. The priority, she said, is needs-based study grants and their increase.
From fall 2023, the state doubled the amount of needs-based study support for students, which currently stands at €440, €270 or €150 per month, depending on the student's household financial situation.
The ministry official noted that the number of recipients of needs-based study support has increased, from 7,200 recipients in the 2023/204 academic year to 7,566 recipients in the fall semester of the 2024-2025 academic year.
In previous years, around 6,000 students, or 13 percent of all students, received needs-based study support. Between 2020 and 2022, nearly €7 million was paid out annually in needs-based study grants; this total rose to nearly €11 million in 2023 and further to nearly €17.6 million last year.
"In the development of this support system, we will continue to take students' economic situation into account more — this is essential to improving access to higher education," Raudmäe confirmed.
She also mentioned that some higher education institutions have already offered performance-based scholarships of their own, adding that in cooperation with future employers, such scholarships may become even more important in the future.
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Editor: Mari Peegel, Aili Vahtla