Korean government offers generous loan terms for poor college students
In a followup to a previous post, Breaking the Cycle of Poverty in Korea through Education: A Social Business Proposal I saw some very exciting news that the Korean government will move to provide long-term full tuition coverage student loans for poor students starting 2010.
It even stipulates that the students are only required to pay back the loan after they find employment over a maximum 25 years. It also supports living expenses.
More detailed article on 헤럴드 경제 (sorry, in Korean) says that the conditions of the loan are:
취업을 못해 일정수준 이상의 소득을 올리지 못하면 상환 의무도 없어진다.
수혜 대상은 기초수급자 및 소득 1~7분위(연간 가구소득 인정액 4839만원 이하)에 속하는 가정의 대학생으로 평균 성적이 C학점 이상이어야 한다. 고소득층인 8~10분위 가정은 기존의 대출 방식을 적용받는다. 특히 1인당 대출 한도액(현행 대학 4년간 최대 4000만원까지)을 없애 연간 등록금 소요액 전액과 생활비 연 200만원을 대출받을 수 있게 된다. 생활비는 기초생활수급자에게는 무상으로, 소득 1~7분위는 소득에 따라 무이자 또는 정상 대출방식으로 지원된다.
Very encouraging indeed. This does remove some of the barriers the poor students had to accessing higher education and bettering their lives.
Still remaining is how to make inroads into the issue of supporting poor kids while they are in school and bridging the gap between them and kids who get private extra-curricular education (사교육).
Some opposing opinions about the new loans. (in Korean)
The article claims:
– If you postpone repayment after graduating, you still get charged interest;
– Given the current employment market, most graduates will not be able to afford the repayment schedule;
– Loans mean that grants given to low-income students will reduced;
– This may be grounds for raising tuition, since you payback after you graduate;
– For the government providing the loans, this is another long-term, low-risk way of financially exploiting parents and students.