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Student loan debt reaches 257.5 billion won, highest recorded amount

Published: 02 Oct. 2025, 18:04

Students and their parents check out brochures at the university fair in Busan on July 14, 2024. [SONG BONG-GEUN]

Nearly 50,000 young people have been classified as credit delinquents after failing to repay their student loans for more than six months, with the total amount in arrears exceeding 257.5 billion won ($184 million). This marks the highest amount since the Korea Student Aid Foundation (Kosaf) was established in 2009. The surge is being linked to broader economic hardship among youth, with nearly 1.2 million young people not engaged in any economic activity.

According to data submitted by Kosaf to Democratic Party lawmaker Jin Sun-mee, who sits on the parliamentary Education Committee, 47,364 people had fallen behind on their general student loan payments by six months or more as of July this year.

Unlike income-contingent loans, general student loans are not subject to income or age restrictions. Borrowers can opt for a grace period during which only interest is paid, followed by a repayment period covering both principal and interest. Those who fall behind on payments for over six months are reported to credit agencies and face restrictions in financial transactions.

Over the past five years, the number of long-term delinquents rose by 7.9 percent from 44,060 in 2021. The overdue balance also increased by 5.9 percent from 243.1 billion won ($173.42 million). Both the number of borrowers and the amount in arrears have grown for three consecutive years since 2023. As of July, 22,104 people were behind on payments by one to six months, with the overdue amount at 114.8 billion won ($82 million) — already close to last year’s year-end figures of 22,638 people and 117.3 billion won ($83.69 million).

Analysts point to the broader economic context. According to Statistics Korea, as of March, among those aged 15 to 29, 269,000 were unemployed. Another 504,000 reported doing nothing in particular, and 434,000 were preparing for employment — all classified as economically inactive youth.

Some have called for structural solutions, such as converting general loans into income-contingent repayment schemes.

“Students who took out loans to attend university are facing both unemployment and debt traps after graduation,” Jin said. “We need to revise the repayment system in a way that reflects young people’s ability to pay.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY LEE BO-RAM [[email protected]]