Daegu City, iM Bank and the Korea Student Aid Foundation (KOSAF) to help young people repay student loans

【Financial News, Daegu = Reporter Kim Jang-wook】 “Don’t worry about repaying your student loans!”
On the 28th, Daegu City signed an agreement with iM Bank and the Korea Student Aid Foundation (KOSAF) in the main conference room on the third floor of its Sanggyeok office to reduce local young people’s financial and psychological burdens and help them make a stable transition into society.
The agreement was launched to ease the debt burden on local young people struggling to repay student loans amid a difficult job market and high living costs, and to help them get back on their feet by supporting credit recovery for those with long-term unpaid loans and those in arrears.
Mayor Choo Kyung-ho said, “I hope this support will be a practical stepping stone to a fresh start, easing young people’s financial and psychological burdens,” and emphasized, “We will continue to develop various support measures so that financial difficulties do not keep them from preparing for the future.”
The student loan repayment support program is funded by 500 million won in social contribution funds provided by iM Bank. In particular, moving away from one-off, unconditional assistance, the program will introduce a “self-repayment matching system” under which young people who repay some of their overdue amounts themselves will receive additional matching support, with the aim of encouraging their drive for independence.
First, a budget totaling 320 million won will be allocated to about 1,842 people whose repayments remain overdue despite a certain period having passed since graduation. Those who pay 5–10% of their loan principal and interest out of their own pocket and thereby meet the requirements for resolving their long-term nonpayment will receive support equal to 100% of the amount repaid, up to 200,000 won per person.
A total budget of 180 million won will also be provided to about 668 long-term delinquent borrowers who have been at least six months behind on their loans and are at risk of being registered as credit-risk borrowers. To help them restore their credit, the program will cover, up to 1 million won per person, both the initial payment required to enter into an installment repayment agreement with KOSAF (10% of the agreed amount) and subsequent repayments.
The city will be responsible for publicizing the program, linking it with the city’s own youth policies, and providing overall support for its implementation. To help young people achieve lasting independence rather than offering only cash assistance, the city also plans to provide employment skills programs through the Youth Growth Project and one-on-one, tailored financial and personal finance counseling through its Youth Financial Clinic.
iM Bank will contribute 500 million won in funding for the program, while KOSAF will handle its operation, including recruiting and selecting participants.

[email protected] Kim Jang-wook Reporter