'Post-Employment Repayment Student Loan' Defaulters 39,000
Defaulters and Arrears Largest Since 2012
As Economy Tightens, Reliance on Debt Increases
Last year, the number of young people who failed to repay student loans and the amount of overdue debt reached the highest levels since statistics began. This indicates that people in their 20s are struggling with debt from the moment they finish their university life and take their first step into society.
According to the National Statistical Portal on the 29th, the number of ‘unpaid defaulters’ who did not repay the ‘income-contingent student loans’ last year was 39,345. This accounts for 14.3% of the total 273,322 people subject to repayment. This is an increase of 3,109 people (8.5%) from 36,236 the previous year, and 35.6 times higher compared to 1,104 in 2012 when the statistics were first compiled.
The ‘unpaid overdue amount’ was recorded at 48.115 billion KRW. This corresponds to 6.9% of the 333.696 billion KRW that was subject to repayment. The overdue amount also increased by 5.464 billion KRW (12.8%) from 42.651 billion KRW a year earlier. Since the first compilation of statistics, this is the highest in all aspects including the size and proportion of defaulters and the overdue amount.
The number of people receiving help from the state, society, and family has decreased, while the tendency to resolve issues independently or rely on debt has become more pronounced. Among those aged 18 to 34 who chose student loans as the ‘main method of financing tuition,’ the proportion was 11.7%. This rose by 1.8 percentage points from 9.9% the previous year. The percentage of young people who said they ‘earn money themselves through part-time jobs, etc.’ also increased from 4.1% to 5.4%.
On the other hand, those who chose national scholarships decreased from 25.7% to 25.3%, and the same trend was seen for private scholarships (1.8% to 1.5%) and support from family (58.5% to 56.1%).
The increased debt burden was addressed by slowing down the pace of entering society. This is because it is difficult to find quality jobs in the employment market due to the economic downturn. Those who used national scholarships and other support can maintain their student status through leave of absence or deferment, and also receive principal and interest deferment benefits.
When asked about the reason for deferring graduation, 11.5% answered “to earn money for tuition or living expenses due to financial reasons.” This nearly doubled from 6.7% three years ago. The percentage of those who said “I don’t think I will get a job even if I graduate” also increased from 20.7% to 24.5%.
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