1st Semester Reduced from 2.0% to 0.15%p
General Repayment Student Loan Late Payment Penalty Rate 3.85%
Students from the National University Student Council Network are making a disaster declaration for the COVID-19 university community on the 6th in front of the Government Seoul Office in Jongno-gu, Seoul. They urged for tuition refunds and measures for remote lectures. Photo by Moon Honam munonam@
[Asia Economy Reporter Lee Hyun-joo] Due to the impact of the novel coronavirus infection (COVID-19), student loan interest rates will be reduced in the second semester following the first semester.
The Ministry of Education and the Korea Student Aid Foundation announced on the 7th that the student loan interest rate, which was 2.0% in the first semester, will be lowered by 0.15 percentage points to 1.85% starting from the second semester.
Through this, the Ministry of Education and the Foundation expect that the interest burden will be reduced by 17.4 billion KRW compared to 2019, and by 21.8 billion KRW annually since 2021, benefiting approximately 1.3 million people.
The delayed payment penalty rate for general repayment student loans, which can be borrowed regardless of income level, will be implemented at 3.85%, down 0.65 percentage points from 4.5% in the first semester.
The joint guarantee procedure that occurs when a student loan borrower under the income-contingent repayment plan goes abroad for overseas study will be abolished, and the pre-approval period for general repayment student loans will be extended from 5 days before the registration deadline to 10 days before the semester start month.
For the second semester student loans, from the 9th, students can apply using their own public authentication certificate through the Korea Student Aid Foundation website or mobile application. Applications are accepted until 2:00 PM on October 15, and loan disbursement for tuition fees will be executed by 5:00 PM on the same day.
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