Starting Next Year, Graduate Students Will Also Be Eligible for Income-Contingent Student Loan Repayment After Employment

Including Master's and Doctoral degrees, and Professional Technical Master's at general graduate schools under 40 years old
Master's loans up to 60 million KRW, Doctoral loans up to 90 million KRW now available
Loan principal and interest repayment rate set at 25%, higher than undergraduate students

Graduate students will also be able to receive income-contingent student loans starting next year.

On the 28th, the Ministry of Education reviewed and approved a partial amendment to the Enforcement Decree of the Special Act on Income-Contingent Student Loan Repayment at the Cabinet meeting. According to the Enforcement Decree, which will be implemented from January next year, the loan eligibility will be expanded to include graduate students, and conditions for designating and releasing long-term non-repayment status have been added.

With this amendment to the Enforcement Decree, the scope of support for income-contingent student loans will be expanded to include those who have completed master's and doctoral programs at general graduate schools, as well as professional master's degree programs at junior colleges.

Graduate students under the age of 40 who fall within the 4th income bracket or below for student loan support can borrow up to 60 million KRW for a master's degree and up to 90 million KRW for a doctoral degree. The age for exemption from repayment obligations for graduate students is set at 65 years or older, the same as for undergraduate students, and the standard repayment rate is set at 25%. This measure considers the higher tuition fees and larger loan amounts for graduate students, as well as the repayment period after obtaining the degree.

The Ministry of Education also refined the grounds for designating and releasing long-term non-repayment status in the Enforcement Decree. Since the law only stipulates the initial designation criterion (3 years after graduation), once designated as a long-term non-repayment borrower, individuals were managed as such until repayment was completed.

In the amended Enforcement Decree, repayment amount brackets for principal and interest are set for specific periods after graduation. The brackets are divided into three categories: if the repayment amount is less than 10%, 30%, or 50% of the principal and interest after 5, 15, and 20 years respectively, the borrower is classified as a long-term non-repayment borrower. If a person designated as a long-term non-repayment borrower repays an amount exceeding the set bracket, the designation is immediately lifted.

Furthermore, to efficiently manage debtors who have the ability to repay but have not done so and to prevent moral hazard, the basis for conducting periodic income and asset investigations on long-term non-repayment borrowers has been established. The amendment resolves discrepancies between the year of designation as a long-term non-repayment borrower and the year of income and asset investigation, and clearly stipulates the payment period (within 30 days) for mandatory repayment amounts by long-term non-repayment borrowers.

Deputy Prime Minister and Minister of Education Yoo Eun-hye stated, "With this amendment to the Enforcement Decree, an environment will be created where graduate students can focus more on their studies and research activities, and we expect to support their growth into highly skilled professionals needed in the future."

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