Credit Delinquents Surge Among Students
By Kang Shin-who
Staff Reporter
A growing number of university students are becoming credit delinquents due to insufficient state-administered scholarships, according to Rep. Kwon Young-jin of the Grand National Party.
The number of students categorized as delinquents by banks for failure to service their debt more than doubled to 7,500 in August from 3,726 the previous year, Kwon said, during a parliamentary audit of the Ministry of Education, Science and Technology.
As of the end of August, the number of students who tapped loans for tuition stood at 935,304, up 30.4 percent from the end of December.
Kwon claimed that most students from low-income households were unable to repay their debt on their own and therefore needed to receive more scholarships awarded by the government.
``Tuition at private universities averages 7.4 million won for a year, a lot larger than the average 4.2 million won state scholarship. This paucity of the scholarship is the key factor behind the rises in credit delinquents among students,’’ Kwon added.
Tuition has increased about 7 percent over the past five years at state-run universities, while private universities have increased it by 6 percent, according to the ministry. Banks also offer no preferential rates for loans to students.
Kwon said the government should raise the scholarship to 7.2 million won to help reduce the number of delinquents. To that extent, he proposed that the government raise the total amount of state scholarship to 577 billion won for 2009 from its original budget of 108 billion won.