Ministry of Education Further Lowers Student Loan Interest Rates... "Loan Repayment Deferral Also Available"

Student Loan Interest Rate Reduced from 2.0% to 1.85%
Priority National Scholarship Support for Borrowers or Parents Facing Unemployment or Business Closure
High-Interest Loan Borrowers Can Switch to Low-Interest Loans

Yoo Eun-hye, Deputy Prime Minister for Social Affairs and Minister of Education / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Hyunju Lee] To support college students facing economic difficulties due to the novel coronavirus infection (COVID-19), measures to support student loan assistance are being promoted.

On the 26th, the Ministry of Education announced that from the second semester of this year, the student loan interest rate will be further reduced from 2.0% to 1.85%.

If students themselves or their parents have experienced job loss or business closure due to COVID-19, making their economic situation difficult, they can receive priority or additional support through the Type II National Scholarship, and student loan repayment deferral will also be possible.

For borrowers who took out loans before 2009 at high interest rates up to 7.8%, a low-interest refinancing loan will be implemented starting from the 27th to ease their interest burden. The number of eligible borrowers is estimated to be about 63,000. If they apply for the low-interest refinancing loan, the loan interest rate will be reduced to only 2.9%, and the loan period can be extended up to 10 years.

Delinquent interest for long-term overdue borrowers will also be reduced. For those who have been overdue on government-guaranteed student loans for more than six months, the installment repayment agreement system will be improved so that by paying 2~10% of the total debt amount, the overdue interest rate will be lowered to 0~2.9%.

By mid-May, support for the first semester Type I National Scholarship and multi-child scholarships is expected to be completed.

Deputy Prime Minister and Minister of Education Yoo Eun-hye said, "We will continuously improve the loan system and, through the Higher Education Finance Committee, work together with universities to devise support measures for college students."

This content was produced with the assistance of AI translation services.