I hear Finnish universities are excellent," I remember my PhD supervisor remarking. This seems to be a common attitude among British academics: Finnish universities are widely seen as a cut above, as is Finnish secondary education. Indeed, the latter is the best in the world, according to the OECD Programme for International Student Assessment (PISA) ratings published in 2008. Higher education in Finland is certainly impressive, but as the sector internationalises and the Government prepares to implement new legislation in 2010, its pitfalls are increasingly in the spotlight.

One of the most conspicuous differences between Finland and Britain is that there is no Finnish debate over so-called Mickey Mouse degrees. Thanks to the work of the Bologna Process in standardising ÖйúAƬ across Europe, Finnish polytechnics now offer masters degrees. But there remains a stark divide. Polytechnics are teaching-focused institutions. They train students, who usually leave with a bachelors degree, for "practical", skilled jobs. Universities are theoretical and increasingly research-focused, and students leave with a masters degree, which requires them to write a pro-gradu or masters thesis.

And, while Finnish universities presently offer free tuition for home and international students alike, they are certainly not easy to get into. Students must excel in highly competitive exams set by each department. According to Birgitta Vuorinen, a civil servant in the Department for Education and Science Policy in the Ministry of Education, last year 68,000 Finns competed for 18,000 first-year places. The Finnish system usually directs applicants towards a job: those who study theology will train as a teacher or as a priest, the number of funded places being based on the need for theology graduates. Those who fail to get into university can resit the exam the following year or study abroad.

The University of Aberdeen is home to a number of undergraduates who have done exactly this. "I tried three times but every time I only just missed out," says one Finnish student studying modern history at Aberdeen. Others go to Sweden - all Finns learn Swedish at school and the country has a small Swedish-speaking minority - or to Estonia. Half of the international students at the University of Tartu, Estonia's de facto national university, are Finns.

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In recent years, funding for Finnish ÖйúAƬ has been lavish. Not only is tuition free of charge, but students have been entitled to as many as ten years of term-time funding to finish degrees that could be completed in five. And on the eve of substantial changes to funding for the sector, a British professor of English literature who has worked in Finland for 25 years has nothing but praise for the current system. "It is a benevolent teaching system underpinned by the belief that all Finnish adults have the right to be educated."

He notes that academic libraries are open to all and anyone may take academic modules at "summer universities". "Students take a broad array of courses outside their subject, and have the time to study their subject in another language - English or Swedish." Moreover, they can continually retake modules if they fail them.

ÖйúAƬ

"But the New Universities Act is going to tighten this up," says the British academic. "There will be big cutbacks and I don't think this is good for Finland."

The New Universities Act (see box overleaf) will also increase the pressure on students to graduate in five years. "If they want more funding they have to explain why they need it," Vuorinen says. Many Finnish students work during term time to supplement their grants, and the new system may well make this more difficult if students are pressured to finish quickly. The British professor is also convinced that departments will have less money and will be likely to offer a less rounded education.

On the other hand, he observes that the Finnish system, once you get into university, is not especially competitive. Overall, degrees are not graded and, although modules are graded, there is no pressure to do more than pass. The pro-gradu is graded, but only those looking to go on to do a PhD need to obtain a cum laude. Juha Janhunen, a professor of East Asian studies at the University of Helsinki, argues that despite its generous funding and good reputation abroad, the Finnish educational system does not encourage excellence. "Finland does well in the PISA test," he says, "because the Finnish system attempts to make everyone averagely good and this neglects talent and excellence."

But scholars who have studied the country and its ÖйúAƬ sector are in broad agreement that ÖйúAƬ is particularly valued in Finland. In her fieldwork in the 1970s, anthropologist Patricia Lander remarked on it, while historian Pekka Hamalainen has argued that highly educated Finns are accorded a kind of elite status even if they are not wealthy. In my own fieldwork, I found a view among some Finnish speakers that "there is no social class ... only the Swedes" (historically the elite were Swedish-speaking) and a perception that all Finnish speakers are working class.

However, latent class terms in Finland are often related to education. Those with university degrees may term themselves "educated" or even "international" (which stresses their English skills). The porvari (derived from the Swedish word for bourgeois) are accused of valuing money more than education (although they may refer to themselves as "educated"). The rough equivalent of "chav" is amis, an insult directed at those who, at 15, attended a vocational school, or ammattiopisto, rather than the academic schooling that leads directly on to ÖйúAƬ.

Perhaps the Finns' emphasis on education has developed as a response to the historical perceptions, highlighted by Finnish sociologist Tarja Laine, that Finns were "uncivilised, lazy children of the soil", alcoholics, "pathologically inclined to suicide" and "Easterners" who were "mongoloids" rather than "Aryans". Being seen to be highly educated is thus an important part of national self-esteem: low national self-esteem and acute concern with foreign perceptions is something that Finns are well known for. In her book Finns in the Shadow of the Aryans: Race Theories and Racism (2000), the late historian Aira Kemilainen argued that Finns were "European" by referring to their high levels of education: "Finland is in many respects more European than the older members of the European Union ... All children learn the second national language and at least one foreign language."

There are indeed a high number of Finns with PhDs (600 doctorates are awarded annually in a country of five million) and the Government has recently become concerned about problems of quantity over quality. Anita Lehikoinen, director of the Division for ÖйúAƬ and Science in the Ministry of Education, says that is it inherently good that Finland boasts a high number of PhDs, because it ensures a supply of highly educated people in professions other than academia.

The Finnish doctorate is, in some ways, highly rigorous; it is anonymously peer-reviewed by two scholars before being published as a book to be publicly defended against an "opponent". But some have questioned that process.

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The British professor of English literature, who has acted as an opponent, believes that the Finnish PhD defence lacks the rigorous disputation of the viva.

"The first time I was an opponent I was very surprised at the process. I was expecting an academic disputation, but by that point the thesis will already have been published as a book, so it's really a kind of formality. I was actually told afterwards that I was a bit harsh; I was expecting something like the UK viva."

Lehikoinen says that university departments are being encouraged to "internationalise" by publishing more research in English. But, according to the Academy of Finland, Finnish research has the least "impact" of any Nordic country's because so many humanities scholars persist in publishing in Finnish.

"I think it's very strange," says a Finnish biologist based at Oulu University. "If your research is important then you should want as many people as possible to read it and critique it and so you should publish it in English."

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But Lehikoinen counters: "We want to keep Finnish alive as a language of research." Nevertheless, she admits that as academia is increasingly anglophone, the only point of Finnish academics writing in Finnish is to "fulfil the social mission of the universities to make important discoveries known to the people". So research may be conducted in English, "but popularised in Finnish".

Many scholars in Finland, especially those whose specialisms are Finnish, continue to write in their native language. Tuomas Lehtonen, secretary general of the Finnish Literature Society, the country's largest academic humanities publisher, says: "Most scholars publish in Finnish and English. It would be difficult to justify publishing only in English and not to communicate with the wider educated domestic audience." He also argues that without this "double strategy", detailed academic books on Finland would not get published because it is the native audience that wishes to read them. "There is a tint of cultural imperialism in seeing English as the only valid way to communicate studies in humanities," he adds.

However, some scholars have called into question the academic standard of Finnish-focused humanities research even when published in English, and especially that published by the partially government-funded Finnish Literature Society.

David Kirby, a historian of Finland and professor emeritus of modern European history at University College London's School of Slavonic and East European Studies, argues that there is a qualitative divide in Finnish humanities research. "The brightest and best are now far more attracted to postgraduate and postdoctoral research on the international plane. I suspect this means that those who continue to work on Finnish topics are probably not in the top rank of scholars. For three years, I was one of an international panel for the University of Helsinki's postdoctoral fellowship scheme, and the difference between natives working within the broader area of international scholarship and those delving into Finnish topics was quite striking."

Kirby says he is also concerned at the way some Finnish Literature Society publications seemingly conflate scholarship with heritage. "It does seem to have expanded its activities, not only as publisher of a wider range of monographs, but also as a conscious promoter of a kind of well-presented 'heritage' literature. There is clearly a cultural agenda at work."

Perhaps there always was. Founded in 1831 as part of the Finnish Romantic nationalist movement, the Finnish Literature Society has played a key role in the promotion of Finnish nationalism. Lehtonen insists that its books are strictly refereed using both Finnish and foreign referees. He accepts that some titles may be described as heritage literature, but insists they are chosen for their scholarly relevance. For him, the society is no longer a "nation builder" but a "memory organisation". "Of course the competition to publish in good journals and in famous publishing houses is much tougher in English, but the choice of topic to a great extent influences this (decision to publish in Finnish rather than English)."

Criticisms of Finnish academia should not overshadow its many good qualities. It is (currently) free and well funded, it educates students to a high academic standard and allows them time to develop intellectually. Its universities are rigorously selective from the outset and it has produced some significant scholars, such as philosopher Georg von Wright. Its scholars and students alike hope that the positive aspects of Finnish ÖйúAƬ are not lost amid a desire to streamline and save money.

TOWARDS A FREE-MARKET MODEL

As a result of the New Universities Act, which will come into force next year, Finland's ÖйúAƬ sector looks set to undergo substantial changes - including the introduction of the first tuition fees in a sector in which courses were previously free to home and foreign students alike.

Although students and academics (represented by the Finnish Union of University Professors) have argued against reforms of the sort the Act will introduce, Finland's Council of University Rectors has long been lobbying for change, as have many scientists seeking to benefit from commercial funding. In 2005, the Finnish National Fund for Research and Development (SITRA) mooted the possibility of tuition fees for all students, and especially for non-EU students. Oulu University's rector, Lauri Lajunen, said universal fees should not be "taboo" and should not be ruled out.

With the new Act, the rectors and SITRA appear to have won the argument. Passed by a vote of 168 to 16 in the Finnish Parliament on 16 June 2009, the New Universities Act is about two connected issues: internationalisation and money. The Act aims to "strengthen the autonomy of Finnish universities" by making them either "legally independent public bodies", in the case of 14 of the country's ÖйúAƬ institutions, or "private foundations", in the case of two others. As of 2010, a minimum of 40 per cent of university board members must be non-academics, with the stated aim of attracting financial experts to run universities.

Only through the radical changes contained in the Act, say university leaders and many researchers, can Finnish universities compete internationally and strengthen academically. Relative financial independence - and the need for business funding - will, they assert, help universities to establish international profiles and better target their resources towards world-class research.

A changed political climate in Parliament has helped to make the reform possible. The 2007 national election saw the pro-business, conservative Kokoomus (National Coalition Party) become the second-largest group in a governing coalition of three parties. The Minister of Education who piloted the act, Henna Virkkunen, is a member of Kokoomus, as is the Minister of Finance, Jyrki Katainen. The ascent of the party - which is presently leading the polls in popularity - may reflect a gradual shift in Finnish opinion away from favouring a social democratic system and towards a free-market model.

Observers cite the recession, and a substantial drop in national tax revenue as a result of high unemployment, as key factors in growing popular support for ÖйúAƬ reform of the sort the Act will usher in. Virkkunen certainly used the current financial climate to argue for the changes, stating: "In times of stringent economy it is especially important to invest in ÖйúAƬ."

"When the Education Act comes into force next year," says Anita Lehikoinen, director of the Division for ÖйúAƬ and Science in the Ministry of Education, "departments will be privatised and encouraged to look beyond the state for funding." On a trial basis, "they will be able to charge tuition fees to a limited number of international (non-European Union) students studying English-language masters courses".

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Her colleague, Birgitta Vuorinen in the Department for Education and Science Policy, is convinced this will not lead to a "corrupt" situation where departments take on as many international students as they can to increase fee income. "It's for a trial period on a very limited number of courses and I don't think that many people would want to come to Finland."