190,000 to Repay Post-Employment Student Loans... Deferments Available for Unemployed and Graduate Students

The National Tax Service announced on April 20 that it has finalized 190,000 individuals subject to mandatory repayment of student loans for earned income attributable to the 2025 tax year, and will notify them of the repayment amounts on April 22. Those experiencing financial hardship or currently enrolled in undergraduate or graduate programs may apply for a deferment of repayment.

Borrowers who receive this notification must pay an amount equivalent to 20% (for undergraduate loans) or 25% (for graduate loans) of the portion of their annual income in 2025 that exceeds the repayment threshold (18.98 million won, or 28.51 million won based on total salary). However, if the borrower has made voluntary repayments to the Korea Student Aid Foundation on income earned in 2025, this amount will be deducted from the notified repayment amount.

Borrowers who have applied for electronic delivery of the repayment notice will receive it via mobile; others can view the notice by mail or on the ‘Post-Employment Student Loan Repayment’ website. Once notified, borrowers can choose the most advantageous repayment method based on their financial situation, either prepayment or withholding at source.

If a borrower does not wish to have the repayment withheld at source by their employer, they can prepay the full repayment amount themselves. Before the employer withholds the amount—i.e., by the end of June—the borrower can either pay 100% of the required amount at once or split the payment into two installments of 50% each (by the end of June and by the end of December). If the borrower pays the full amount by June 1, or pays 50% by June 1 and the remaining 50% by November 30, the ‘withholding notice (for obligors)’ will not be sent to the employer.

If prepayment is not made, the employer will withhold and pay one-twelfth of the annual repayment amount from the employee’s monthly salary over a one-year period (from July 2026 to June 2027). For borrowers who do not have an employer responsible for withholding, or if the repayment amount is less than 360,000 won, repayment must be made according to the payment notice by the due date (June 30, 2027). If the borrower becomes re-employed, the portion of the repayment amount that has not yet been paid (after deducting any previously repaid amount) will be notified to the new employer for withholding at source.

Borrowers facing financial difficulties due to unemployment, resignation, or parental leave, or those currently enrolled in undergraduate or graduate programs, may apply for a deferment of the notified repayment amount. The deferment period is two years for cases of economic hardship such as unemployment, and four years for those enrolled in undergraduate or graduate programs.

Additionally, even if the borrower’s total non-employment income in 2025 is below the repayment threshold due to financial hardship caused by unemployment or resignation, they may apply for a deferment. For those enrolled in undergraduate or graduate programs, deferment can be requested regardless of financial circumstances.

In 2026, the National Tax Service has improved the deferment application process so that applicants do not need to submit separate supporting documents (such as a certificate of business closure) when applying for a deferment due to business closure. In cases of unemployment or resignation, the system will be improved to allow applicants to apply for deferment using public MyData without submitting supporting documents. Borrowers seeking a deferment can apply via the ‘Post-Employment Student Loan Repayment’ website (mobile or PC), without visiting the tax office.

The National Tax Service plans to continue promoting user-friendly, borrower-centered services to ensure that student loan borrowers can make repayments more easily and conveniently. For withholding obligors with no changes such as resignation or transfer, a pre-filled service will be provided to automatically generate repayment statements identical to the previous month’s, allowing for error-free submission. In addition, applicants will be promptly notified of important information—such as approaching payment deadlines—via KakaoTalk notifications and MMS, helping ensure that no critical information is missed.

Going forward, the National Tax Service will continue to provide timely information on repayment schedules, repayment methods, and various support programs so that student loan borrowers can conveniently meet their repayment obligations.

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