Main lines of development of the Korean student loans scheme

The government-supported student loans scheme in the Republic of Korea is of long standing, but there have been few in-depth analyses regarding its performance until recently. One of the main reasons for this can be traced to the fact that the scheme covers relatively few students in the higher-education sector. More profoundly, this is related to the structure of educational finance in the Republic of Korea. Public educational expenditure has placed more weight on primary and secondary sectors, and educational financing in higher education depends on the private expenditure. Therefore, the government loans scheme has been given low policy priority in higher-education finance.

However, as the quality of higher education has come to be a critical issue recently, it has often been suggested that university tuition should be increased to a realistic level to help to overcome the financial difficulty of higher-education institutions. In this context, the student loans scheme has increasingly been targeted as a solution to a range of pressing policy problems facing governments. Since it is considered as an option to relieve pressures on national budgets by expanding the access of the poor to university education, as well as by increasing the cost recovery of higher education, the need for thorough examination of the scheme is evident.