Gwangju City Opens Applications for 'Student Loan Credit Recovery Support Program for Credit Warning Individuals'

5% Support for Student Loan Debt

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Gwangju Metropolitan City announced on the 13th that it will accept applications from this month until November for the ‘Student Loan Credit Recovery Support Project for Credit Delinquents’ to help young people with long-term student loan delinquencies restore their credit.

Youth aged 19 to 39 residing in Gwangju who have delayed repayment of student loans borrowed from the Korea Student Aid Foundation for more than six months and are experiencing restrictions in various financial activities such as credit card use can participate.

Gwangju City provides participants with one-on-one financial counseling services, and if they choose to sign a debt installment repayment agreement with the Korea Student Aid Foundation after counseling, 5% of the debt amount (up to 1 million KRW) will be supported.

The Korea Student Aid Foundation offers benefits such as cancellation of the delinquency information in the credit evaluation data of the youth, full exemption of delinquency interest, and postponement of legal actions such as asset seizure, thereby alleviating economic constraints caused by debt.

Last year, eight special metropolitan cities including Gwangju, Seoul, and Daejeon implemented credit recovery support projects as the number of long-term student loan delinquents increased due to the prolonged COVID-19 pandemic and economic recession.

In particular, Gwangju City signed a business agreement with the Korea Student Aid Foundation last year to provide an opportunity for young people to repay overdue amounts and choose credit recovery methods suitable for their individual situations, supporting the credit recovery of a total of 55 long-term delinquent youths.

This project will accept applications until November and provide support within the budget range. Youths wishing to participate can refer to the city’s website public notices and apply via email, fax, or mail to the City Youth Policy Office.

Kim Young-seon, the city’s Youth Policy Officer, said, “The issue of student loan delinquency is emerging as a social structural problem as it is linked to employment difficulties, illegal loans, credit delinquency, and resulting economic and psychological contraction, marking the starting point of youth poverty. We hope this project will be a starting point for young people to break the vicious cycle of debt and confidently become independent members of the local community.”

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