"Support for Private Education Too"… Seogeumwon Revamps Education Loan System for Vulnerable Groups

[Asia Economy Reporter Song Seung-seop] The Korea Inclusive Finance Agency announced on the 15th that it will reform the education loan system to reduce the educational gap and alleviate the childcare burden for children from low-credit and low-income vulnerable groups.

With this reform, the scope of the "Education Expense Support Loan" product, which supports education expenses for children of vulnerable groups in elementary, middle, and high school, will be expanded from public education to include private education expenses such as academy fees. The interest rate for the "Vulnerable Group Education Loan," targeted at single-parent and multicultural families, will be lowered by 1.5 percentage points from an annual 4.5% to 3.0%.

Eligible borrowers for these loan products include those with a personal credit score in the bottom 20% (credit grade 6 or lower), near-poverty class, or those who meet at least one of the Earned Income Tax Credit eligibility criteria, and can borrow up to 5 million KRW. Borrowers can choose between principal installment repayment or principal and interest installment repayment within 5 years, and a grace period of up to 1 year can be set.

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