Learners in the Academic Credit Bank System Can Also Receive Student Loans Starting in 2023

Expansion of Student Loan Support to Reduce Tuition Burden
Repayment and Grace Periods Selectable Within a Maximum of 18 Years
Eligibility: Under 55 Years Old, Up to 40 Million KRW Per Person

[Asia Economy Reporter Han Jinju] Learners in the Academic Credit Bank System will be able to use student loans starting from the first semester of next year.

On the 13th, the Ministry of Education announced the '2023 Plan to Introduce a Student Loan System for Academic Credit Bank System Learners.' From next year, learners in the Academic Credit Bank System will be able to receive student loans at the same interest rates as university students.

For example, if a learner borrows 3 million KRW for tuition, with an 8-year grace period and a 10-year repayment period, applying a market bank interest rate of 4.76%, the total interest paid would be 1,142,400 KRW, with an average monthly interest payment of 11,900 KRW. In the case of student loans, the interest rate for the second semester of this year is 1.7%, resulting in a total interest payment of 408,000 KRW and an average monthly interest of 4,250 KRW. This means a monthly interest saving of 7,650 KRW and a total interest saving of 734,400 KRW.

The Academic Credit Bank System is a system that allows learners to earn credits by recognizing various forms of learning or qualifications inside and outside of school, and upon meeting the criteria, obtain a degree. It includes lifelong education facilities such as university (specialized) affiliated lifelong education centers, vocational specialized schools, academies, schools recognized for credit, part-time registration, and qualification acquisition. Since its implementation in 1998, 940,000 people have obtained degrees through the Academic Credit Bank System.

The 'Student Loan System for Academic Credit Bank System Learners' is operated reflecting the characteristics of various learners and educational training institutions in the Academic Credit Bank System, which differ from university students in educational conditions. The grace and repayment periods for student loans are designed mainly around the 'general repayment student loan system,' which allows borrowers to choose within a maximum of 18 years (8 years grace, 10 years repayment) according to their circumstances.

The target for student loan support includes those who newly (for the first time) apply for or are currently enrolled (or planning to enroll) in evaluation-recognized courses at Academic Credit Bank System educational institutions designated by the Minister of Education as student loan support institutions. Applicants must be 55 years old or younger and have a grade of 70 points (C grade) or higher in the previous semester. The loan limit is up to 40 million KRW per person. However, those who are delinquent on student loans or have defaulted on financial obligations are restricted from borrowing.

The Ministry of Education explained, "Student loans for Academic Credit Bank System learners will be operated limited to tuition fees only; living expense loans will not be available at this time," and added, "Living expense loans will be considered for support in the future after reviewing the loan usage status and appropriate loan limits for Academic Credit Bank System learners."

The Ministry of Education selects institutions eligible for student loan support annually by checking each institution's financial soundness and appropriateness of business operations. From October 11 to 17, regional on-site briefing sessions will be held for Academic Credit Bank System institutions to guide them on how to participate as support target institutions and the evaluation criteria.

Institutions wishing to support learners with student loans can submit application documents to the Korea Student Aid Foundation from October 31 to November 18. The Ministry of Education plans to announce the final selected institutions through the Minister of Education's notification in December.

Learners who need student loans can check the eligibility requirements such as whether their course and educational institution support student loans, age, and grade criteria starting from January next year, and then apply for student loans on the Korea Student Aid Foundation website.

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