200,000 Required to Repay Student Loans... Up to 2-Year Deferral Available for Financial Hardship

Notification of "2024 Mandatory Student Loan Repayment Amount" Sent by National Tax Service

The National Tax Service announced on April 23 that it had notified 200,000 recipients of post-employment student loans, who became subject to repayment obligations based on their earned income from the previous year, of their "2024 mandatory repayment amount."

The post-employment student loan repayment system is designed to provide equal opportunities for higher education regardless of economic circumstances by offering student loans to university (including graduate) students, with the principal and interest to be repaid according to the borrower's income level after they begin earning income. The Korea Student Aid Foundation is responsible for student loan disbursement and voluntary repayments, while the National Tax Service handles mandatory repayments based on income.

The mandatory repayment amount for 2024 applies when a borrower's annual income exceeds the repayment threshold of KRW 26,790,000 in total salary. The amount is calculated as 20% of the excess income for undergraduate students and 25% for graduate students. If the borrower made voluntary repayments to the Korea Student Aid Foundation in 2024, those amounts are deducted before the mandatory repayment amount is notified.

Borrowers can pay the notified mandatory repayment amount in various ways, depending on their personal circumstances. If a borrower does not want the mandatory repayment to be withheld directly from their salary by their current employer, they can pay the amount in advance themselves. If the full or half of the mandatory repayment amount is paid by the end of May, the employer will not be notified to withhold the repayment. If payment is made by the end of June, the repayment will not be withheld from the salary. If the borrower does not choose to pay in advance, the employer will withhold one-twelfth of the mandatory repayment amount from the borrower's monthly salary over a one-year period (from July 2025 to June 2026).

However, if the borrower is experiencing financial hardship due to unemployment, resignation, or parental leave, repayment can be deferred for up to two years. If the borrower is currently enrolled in a university (including graduate school), repayment can be deferred for up to four years.

The National Tax Service provides an "Alimi Service" for borrowers of post-employment student loans to facilitate convenient repayment. By applying for the Alimi Service through the student loan website, borrowers can receive notifications via Kakao AlimTalk regarding approaching repayment deadlines and semiannual reminders about deferred repayment deadlines.