Student loan arrears doubled... Representative Moon Jin-seok emphasizes ‘preventive safety net’

Jin-Seok Moon “We must not be driven to forced execution… We must have a preventive safety net.”

(Seoul = Yonhap News) Reporter Ahn Jung-hoon = It was pointed out on the 24th that the amount of student loan arrears has more than doubled in six years, so the preventive safety net system, such as deferral of repayment, needs to be supplemented.

According to data submitted by the Korea Scholarship Foundation to the Democratic Party of Korea, a member of the National Assembly's Finance and Economic Planning Committee, the amount of student loan arrears more than doubled from 42.651 billion won in 2020 to 87.351 billion won in July this year.

The number of people in arrears also increased from 36,236 in 2020 to 60,699 in July this year.

Accordingly, the number of people who received student loan repayment deferral increased from 7,802 in 2020 to 14,869 last year. As of July this year, the number of people with repayment deferrals had already reached nearly 9,355.

The amount of arrears has more than doubled, but the number of compulsory collections has increased more than 40 times.

In 2020, there were only 467 cases of forced collection due to student loan delinquency, but as of July of this year, 19,244 cases were recorded, exceeding the total number of cases last year (17,769 cases).

Considering that 85.9% of long-term delinquent borrowers on general repayment student loans are in their 30s or older, the risk that debt incurred in youth will continue into middle age is increasing.

Representative Moon Jin-seok emphasized, “To prevent students from being pushed into reminders and forced execution before they have the ability to repay, we must have a preventive safety net, such as guidance on the stages before delinquency, repayment deferral, and linkage with debt adjustment.”