Assemblyman Seodongyong: College Students Postpone Graduation, Student Loans Increase, Long-term Delinquencies Rise

Increase in Student Loans for Over-Semester Graduates and Long-Term Delinquents Over 6 Months

Need to Expand National Scholarships and State Responsibility for Primary, Secondary, and Higher Education

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik] Seo Dong-yong, a member of the National Assembly’s Education Committee from the Democratic Party of Korea (representing Suncheon, Gwangyang, Gokseong, and Gurye-eul in Jeonnam), announced that an analysis of data submitted by the Korea Student Aid Foundation revealed an increase in student loan borrowing for extended semesters among university students after COVID-19.

This is because university students postponed their graduation due to the prolonged COVID-19 pandemic.

The “extended semester student loan” used by students who delay graduation is a system where the Korea Student Aid Foundation provides loans to students who have exceeded the regular semesters but have not met the graduation credit requirements, and are taking double majors or retaking courses.

As of the end of August 2022, 15,592 students had taken out loans for living expenses and tuition under this system.

The amount these students borrowed reached 46.9 billion KRW.

This accounts for 92.8% of the 16,789 borrowers and 92.7% of the 50.6 billion KRW loan amount as of the end of 2021.

Given that the “extended semester student loan” steadily increased with 16,340 borrowers and 47.7 billion KRW in 2019, 16,979 borrowers and 50.1 billion KRW in 2020, and 16,789 borrowers and 50.6 billion KRW in 2021, the loan borrower and loan amount status as of August this year, reaching the 90% range of the previous year, suggests a high possibility that both the number of borrowers and loan amounts will increase compared to last year.

Additionally, long-term delinquencies on student loans overdue by more than six months have also increased.

As of the end of August 2022, the total number of long-term delinquency cases among university and graduate students was 109,086, with overdue amounts reaching 179.6 billion KRW.

Compared to 106,901 cases and 178 billion KRW at the end of 2021, this represents an increase of 2,185 cases and 1.6 billion KRW.

If the current trend continues, the number of long-term delinquencies could surpass the 109,077 cases and 185.5 billion KRW overdue amounts recorded in 2020.

In particular, long-term delinquencies among graduate students have increased more in both number and scale than those among university students.

For students enrolled in four-year general universities, long-term delinquency cases slightly decreased from 46,167 in 2020 to 44,536 in 2021 and 44,849 in 2022, but for graduate students, the cases increased from 43,493 in 2020 to 43,383 in 2021 and 45,055 in 2022.

Graduate students also have larger long-term delinquency amounts than university students. For four-year general universities, the amounts were 65.6 billion KRW in 2021 and 64.5 billion KRW in 2022, whereas for graduate students, the amounts were 86.7 billion KRW in 2021 and 89.6 billion KRW in 2020.

COVID-19 has also increased the scale of loans among university and graduate students.

Looking at the number of borrowers by loan scale among graduates from 2019 to 2021, the number of university students with student loans was 138,585 in 2019 and 22,005 for graduate students, increasing to 140,331 university students and 28,943 graduate students in 2020, and further to 189,410 university students and 32,965 graduate students in 2021.

The number of students graduating with debts exceeding 20 million KRW also increased.

In 2019, 8,583 university students had student loans exceeding 20 million KRW, which rose to 10,975 in 2021.

Graduate students also increased from 6,693 to 10,313.

There were even graduates with cumulative loans exceeding 90 million KRW in 2021: one university student and 18 graduate students.

Regarding this, Assemblyman Seo Dong-yong said, “The increase in student loans among young people who have gone through difficult times due to COVID-19 can only be explained by the heavy burden of high tuition fees and living expenses,” adding, “Before the tuition deregulation, which has been continuously mentioned since the inauguration of the Yoon Seok-yeol administration, the government should expand the number of national scholarship recipients and the amount paid, and increase the state’s responsibility and financial support not only for elementary, middle, and high school education but also for higher education.”

Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik hss79@asiae.co.kr

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