Education Committee Agrees on Post-Employment Student Loan Repayment Act... "Exemption Up to 100% of Median Income"

Opposition Proposal Accepted, Expansion of Tuition Loan and Work-Study Scholarship Support Ranges
Likely to Pass the Plenary Session After Overcoming the Legislation Committee Hurdle

The National Assembly's Education Committee on the 29th reached a consensus and approved the 'Partial Amendment to the Special Act on Repayment of Student Loans after Employment,' which had previously seen disagreements between the ruling and opposition parties.

On the same day, the Education Committee held a plenary session and passed a revised version of the 'Partial Amendment to the Special Act on Repayment of Student Loans after Employment,' which is currently pending in the Legislation and Judiciary Committee. The amendment sets the exemption from repayment of interest on student loans after employment to university students with household income at or below 100% of the median income and expands the tuition loan brackets and work-study support brackets from the current 8 brackets (based on last year's recognized monthly income of 10.24 million KRW for a family of four) to 9 brackets.

Related government departments agreed to handle the necessary budget for next year alongside the bill's passage during the National Assembly's budget review.

In May, the opposition party unilaterally passed an amendment to the 'Special Act on Repayment of Student Loans after Employment' that exempts interest accrued before repayment begins for all university students who took out student loans. Since then, there had been significant disagreement between the ruling and opposition parties over exempting interest for higher-income households. The ruling party proposed limiting the exemption to those with household income at or below 100% of the median income, while suggesting expanded work-study scholarships and low-interest living expense loans for low-income and socially vulnerable groups.

In this context, the opposition party re-proposed expanding the tuition loan and work-study scholarship support brackets, leading to the formation of a consensus.

[Image source=Yonhap News]

Regarding this, Hong Ik-pyo, the floor leader of the Democratic Party, introduced the bipartisan agreement on the student loan law, stating, "The exemption target for interest has been expanded from basic livelihood security recipients, near-poverty groups, and multi-child families to those with household income at or below the median income, and the interest exemption period, which previously ended upon graduation, has been extended until the start of repayment." He added, "In cases of deferment due to unemployment, business closure, or parental leave, interest during the deferment period will also be exempted." He further explained, "Most importantly, the Ministry of Education agreed to the Democratic Party's demand to expand the target groups for post-employment student loan repayment and work-study scholarships up to the 9th bracket. This provides an opportunity to resolve the grievances of young people from lower-middle-income households who were excluded from support because their parents owned apartments in the metropolitan area."

Lee Tae-gyu, the education committee secretary of the People Power Party, said, "There were pros and cons regarding the Democratic Party's additional demands, but after repeated consultations between the party and the government, it was finally decided to accept the opposition party's position magnanimously." He introduced, "1.43 billion KRW was pre-allocated in next year's government budget, and according to the bipartisan agreement, an additional 39.7 billion KRW was approved during the recent Education Committee budget review."

Initially, the Democratic Party had stated that if the amendment to the student loan law pending in the Legislation and Judiciary Committee was not processed there, they would directly refer it from the Education Committee to the plenary session for consideration. However, as the ruling and opposition parties have agreed to process the bill jointly, it is expected that the bill will be handled through normal procedures including the Legislation and Judiciary Committee.

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