History of the student loans schemes in korea

The first legal provision for student loans was set up in the Education Act early in the 1960s. The scholarship system provided for in the Act became concrete by the laws pertaining to student loans in 1961, and by its enforcement regulations in 1962. The law clarified to draw up the national budget for the student loan and specified the loan process. The stated purpose of the student loan is to financially support the poor students enrolled in tertiary schools, including graduate schools, technical colleges and secondary-vocational schools.

The Ministry of Education started its loans programme in 1975. The
loans programme has been activated since 1985, and enlarged its target
population after the foreign currency crisis late in 1997. It disburses interest-
subsidized student loans for the poor in the entire higher-education sector
and is the largest in scale among the six loans schemes run with the
government’s financial support. Before the MOE&HRD scheme, the
Korea Teachers’ Pension (KTP) started its student loans programme in
1967. The loans programme aims at promoting teachers’ welfare by
financial support for the education of the teachers themselves and for
their children.

With a similar purpose to the KTP, the Government Employees Pension Corporation has provided student loans since 1976. The loans scheme targets public officials. It was supported from the officer annuity fund until 1999, but was then discontinued temporarily because of the financial condition of the fund, but continued to obtain support from the financial budget of the central government and local governments.

More recently, the Korea Labour Welfare Corporation has offered
scholarships and loans for employees certified as industrial accident victims
from 1987. In addition, the Ministry of Labour has provided student loans
for employees, since 1995. The target of this loans programme is insured
people, hired in companies that have more than one regular employee.
Also, the Korea Research Foundation has been providing subsidized loans
since it was merged with the Korea Scholarship Foundation in 1999. Before
1999, the Korea Scholarship Foundation was in charge of the loans
programmes.