'Income-Contingent Student Loan Repayment' Support Extended to Graduate Students... Academic Performance Criteria Removed

From Q1 Next Year... Support Up to 60 Million KRW for Master's, 90 Million KRW for Doctorate
No GPA Requirement of C or Above in Previous Semester... Interest Waiver for Low-Income Students During Enrollment

On the 9th, at the 10th Social Relations Ministers' Meeting and the 3rd Human Investment and Talent Development Council held at the Government Complex Sejong, Deputy Prime Minister and Minister of Education Yoo Eun-hye is speaking.

[Asia Economy Reporter Han Jinju] Starting from the first semester of next year, graduate students will also be able to use the 'Income-Contingent Student Loan' program. The academic performance criteria will be eliminated so that students can use student loans regardless of their grades.

On the 9th, the Ministry of Education held the 10th Social Relations Ministers' Meeting and the 3rd Human Investment and Talent Development Council at the Government Complex Sejong with related ministries to discuss the 'Improvement Plan for the Income-Contingent Student Loan System.'

Deputy Prime Minister and Minister of Education Yoo Eun-hye stated, "We want to support students to develop their abilities on their own if they have potential and willpower, even if their economic conditions are difficult," adding, "Graduate students will also be able to receive income-contingent student loans, and interest accrued during enrollment will be waived so that low-income students can continue their studies without the burden of tuition fees."

The support target for the 'Income-Contingent Student Loan,' which was previously available only to undergraduate students, will be expanded to include graduate students. This reflects the partial amendment of the 'Special Act on Income-Contingent Student Loans,' which passed the National Assembly plenary session last month. Although graduate students bear tuition fees more than 1.8 times higher than undergraduates, the support system is insufficient, and full-time master's and doctoral students often find it difficult to engage in economic activities to cover tuition fees.

The loan age limit is up to 40 years old, with tuition loan support up to KRW 60 million for master's programs and KRW 90 million for doctoral programs. Living expenses can also be borrowed up to KRW 3 million per year. The mandatory repayment amount is calculated by multiplying the repayment rate (25%) by the amount obtained by subtracting the repayment threshold income from the annual income amount.

From the first semester of next year, the academic performance requirement for income-contingent student loans will also be abolished. Currently, students must have a minimum grade of C in the previous semester to qualify for student loans. Due to this grade requirement, more than 10,000 students annually from 2018 to last year were unable to receive student loans.

Even before the system is implemented, to support students who inevitably fall short of the grade requirement due to lack of time for studies caused by part-time jobs, the special approval system for the second semester of this year will be expanded. The special approval system criteria will be relaxed from the current 'approval for D grade or higher twice' to 'approval once even if there is one F grade among the two times.'

Low-income and multi-child family students will be fully exempted from interest accrued during their enrollment period. The repayment obligation for student loans of young people who have received bankruptcy discharge decisions will also be waived. The government estimates that about 88,000 people will benefit from the expansion of scholarship support targets.

Additionally, considering the recent employment market situation and the job-seeking period of young people, the government will also improve the system for long-term non-repayment cases. Currently, those who have no repayment history for more than three years after graduation or whose repayment amount is less than 5% of the loan principal and interest within three years after repayment commencement are classified as long-term non-payers. Going forward, the criteria will be unified to classify debtors whose repayment amount is less than 10% of the loan principal and interest for more than five years after graduation.

To prevent moral hazard among debtors with repayment ability, plans will be made to conduct periodic income and asset investigations targeting long-term non-payers.

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