Student Loan Credit Red Flag? Gyeongnam Province Will Help!

Partial Repayment Initial Deposit Support and Full Waiver of Overdue Interest

[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Seryeong] Gyeongsangnam-do has introduced support measures for young people who have become credit delinquents due to overdue student loan repayments for more than six months.

According to the province, young people with long-term overdue student loan repayments face disadvantages in financial transactions such as card suspension and loan restrictions, limiting their economic activities.

Many young people remain credit delinquents despite their willingness to repay loans due to the heavy financial burden.

Gyeongnam-do has decided to implement a student loan credit recovery support project to help young people struggling with employment or entrepreneurship due to student loan delinquencies.

Gyeongnam Provincial Government Office.
Photo by Lee Seryeong

The project is conducted through an agreement with the Korea Student Aid Foundation, and Gyeongnam-do supports an initial payment of 10% of the debt amount, up to 1 million KRW, for signing an installment repayment agreement.

The Korea Student Aid Foundation offers installment repayment of the debt for up to 20 years and fully waives default interest and other delayed compensation charges.

The registration of credit information for student loans handled by the foundation is canceled, and legal actions such as provisional seizure are also deferred.

For the remaining debt amount, installment repayment can be made interest-free for 10 years, or 20 years if the amount exceeds 20 million KRW.

Any young person aged 19 to 39, registered as a credit delinquent with the Korea Student Aid Foundation for student loans and having a resident registration address in Gyeongsangnam-do as of February 1, 2023, the announcement date of the project, can apply.

Applications are accepted online through the Gyeongsangnam-do Youth Information Platform from the 1st of this month until the budget is exhausted.

Detailed application methods and support information can be found on the provincial website and the Gyeongnam Youth Information Platform.

Since the first implementation of the project in 2019, the province has supported a total of 1,162.14 million KRW, including initial payment support for student loans and waiver of default interest by the Korea Student Aid Foundation, helping 446 young people in Gyeongnam escape credit delinquency by last year.

An official from the Youth Policy Division said, “We hope this project will provide a small help to young people facing economic difficulties,” and added, “We will actively support Gyeongnam youth to establish an economic independence foundation and carry out normal economic activities.”