Seoul, July 05 (Korea Biz Wire) – The Korean government on June 26 announced new measures aimed at easing the financial burden on college students and graduates struggling with heavy student loan debt.
Effective July 15, the initiative expands eligibility for the government’s low-cost loan program to reach more borrowers. Under the revised plan, students who took out high-interest loans within six months of applying for government-subsidized refinancing will now qualify.
Previously, eligibility was limited to those who borrowed prior to June 18, 2012. The program will also extend to individuals under 29 who are enrolled in non-accredited institutions, such as technical schools or vocational training centers.
“This program will benefit more than 100,000 young students and recent graduates burdened by debt,” said Kwon Yui, an official at the Financial Services Commission overseeing lending programs for low-income citizens.
A government-commissioned Gallup survey of 5,037 college students in 2012 found that 18.3 percent—about 922 students—had outstanding loans, with 3.7 percent relying on high-interest credit. Based on the survey, officials estimate that 110,000 students and graduates are paying annual rates above 20 percent, while about 39,000 are indebted to private lenders charging exorbitant rates.
