More than 60,000 young Koreans cannot repay student loans after finding work

More than 60,000 South Koreans who have graduated and started earning income are still unable to repay their student loans. Their combined arrears now approach 90 billion won.

National Tax Service data obtained by Democratic Party lawmaker Moon Jin-seok showed that 60,699 people were behind on income-contingent student loans as of July. Their unpaid balance totalled 87.351 billion won, or about 1.44 million won per borrower on average.

The system, introduced in 2010, provides tuition and living-cost loans to university and graduate students. Once borrowers’ income exceeds a set level after graduation, the tax authority collects repayments through methods including automatic withholding.

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The number of student loan delinquencies has increased sharply, and the pace of growth is also substantial.

The number of delinquent borrowers rose from 36,236 in 2020 to 44,216 in 2022 and 51,116 in 2023 before moving above 60,000 this year. Arrears increased from 42.651 billion won in 2020 to 55.19 billion won in 2022, 66.145 billion won in 2023, 74.034 billion won in 2024 and 81.312 billion won in 2025. The balance was already 7.4% higher than a year earlier by July.

Tax authorities had issued 19,244 seizure orders by July. A total of 9,355 people, with loans worth 16.15 billion won, received repayment deferrals because they were students or faced hardship from unemployment, business closure, parental leave or disasters. Another 110,051 people were excluded from mandatory repayment last year after their income fell or for similar reasons.

Moon said the rising number of delinquencies and the pace of increase required changes to deferral and reduction standards, combined with measures to support employment and income for young people who cannot repay because their earnings are low.

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As more young people with low incomes continue to be unable to repay, we need to revise the standards for repayment deferrals and reductions and address the issue alongside employment and income support measures.