By Lee Tae-hoon
Staff Reporter
The National Assembly approved Monday the ``study-now-pay-later'' program during a plenary session, convened exclusively to discuss student loans.
The Ministry of Education, Science and Technology expects some 740,000 students, or roughly 30 percent of total college students, to benefit from the system, down from a million that the government previously announced.
The student loan will cover the entire tuition fees and one million won ($888) for living expenses per semester. The annual interest rate is set at 5.8 percent, considerably higher than other government loans.
Legislators agreed last Wednesday to endorse the income contingent loan scheme by holding an ad-hoc session after the government had warned of a possible failure to offer the loan in the first semester of this year due to time constraints.
The Korean Council for University Education said its 200 four-year universities nationwide would extend their tuition payment deadline for freshmen to give them sufficient time to receive the new loan.
The ministry decided last Thursday to set stricter criteria for the long-term loans by excluding students whose average grades were C or lower last semester. Some 75 percent of university students received a grade average of B or better last year.
High school graduates with Grade 7 or lower in the College Scholastic Aptitude Test will not be able to apply for the scheme ― the test has nine grades with ninth being the lowest.
Applicants must be under the age of 35 and their family's annual incomes must not exceed 48.39 million won.
Applications for the loans should be submitted through the state-run Korea Student Aid Foundation Web site between Jan. 15 and Jan. 28 for freshmen and Jan. 25 and March 18 for registered students.
The recipients will have a portion of their incomes automatically deducted from their paychecks, after they gain regular employment following graduation, as long as they make more than 16 million won.