Jeongeup City Supports Credit Recovery for Young People with Long-term Student Loan Delinquency

Up to 1 Million KRW per Person
For Young People Aged 18 to 45

Jeongeup City in North Jeolla Province announced on the 27th that it will implement a credit recovery support project to help young people registered as credit delinquents due to long-term student loan defaults regain their economic footing.

Jeongeup City Hall exterior view. Provided by Jeongeup City

Once registered as a credit delinquent, individuals face restrictions not only on card usage and loans but also on employment at certain financial institutions. Since 2022, the city has been running this project to help young people struggling with student loan repayment burdens achieve self-reliance from the very start of their social lives.

This project supports young people who have taken out student loans from the Korea Student Aid Foundation but have fallen into credit crisis due to long-term delinquency by providing the initial payment (10% of the principal, up to 1 million KRW per person) required to enter into an installment repayment agreement.

Through this, the Korea Student Aid Foundation removes credit judgment information and waives overdue interest (delinquency penalties). The installment repayment period can be up to 20 years depending on the debt amount. Starting this year, the initial payment support rate has been increased from the previous 5% to 10%, and if the full 10% is paid, all delinquency penalties are waived.

Eligible applicants are young people aged 18 to 45 who have been registered residents of Jeongeup City for at least one year as of the announcement date and have credit judgment information registered with the Korea Student Aid Foundation. Applications can be submitted in person at the City Hall's Job and Economy Division or by email until the end of November. Credit registration status can be checked at the Korea Student Aid Foundation Credit Recovery Support Counseling Center, and inquiries about the project can be directed to the Youth Support Team.

A city official stated, "Youth debt can have negative effects on society as a whole, including reduced consumption and the abandonment of marriage and childbirth," and added, "We hope this project will serve as a stepping stone for young people to resume employment and economic activities."