Korea: College students' living expense loans increase amid soaring housing, food costs

A college student looks at a rental listings displayed on a board near Chung-Ang University in Dongjak District, Seoul, Aug. 12. (Source: Yonhap)

“I make about 600,000 won ($440) a month from my part-time job at a cafe. Even with a little help from my parents, I can't cover my rent and living expenses,” said Kim, a college student living in Seongbuk District, Seoul.

“I've been asking my friends about income requirements and other eligibility criteria because I'm considering taking out a loan from the Korea Student Aid Foundation (KOSAF) next semester,” she said.

Kim's concerns reflect a broader trend, with living-expense loans taken out by college students surging by nearly one-third over the past two years, while overdue balances also rose sharply, data showed Thursday.

The amount of living-expense loans extended to university students by KOSAF rose 32.8 percent to 850.6 billion won ($626.5 million) in 2025 from 640.67 billion won in 2023, according to data submitted by KOSAF to Rep. Kang Kyung-sook of the Rebuilding Korea Party.

The number of loans also increased from 432,171 to 457,129 over the same period.

The loans are designed to provide students with accessible financing for living expenses. They carry an annual interest rate of 1.7 percent, with repayment beginning after borrowers start earning an income.

The increase was particularly noticeable among students from lower-income households.

Loans taken out by recipients of basic livelihood assistance, near-poverty households and students in the lowest three income categories used to determine eligibility for government student aid rose 33.9 percent to 363.47 billion won in 2025 from 271.5 billion won in 2023.

KOSAF said a survey of 44,818 living-expense loan recipients conducted last year found that most borrowers used the money for its intended purposes, including food and transportation expenses.

Rising housing costs and inflation appear to be factors adding to the financial pressure on students.

Monthly rent for studio apartments in major university neighborhoods in Seoul rose by about 8 percent over the past year, according to Dabang, a real estate information platform.

Kang called on KOSAF to conduct a more detailed assessment of borrowers' financial situations, arguing that more detailed research is needed into how young people's debt is accumulating and what is driving them to borrow to cover living expenses.

“KOSAF appears to have considered its task done by having borrowers click a few check boxes when taking out loans, while failing to carry out a substantive assessment or carefully review its policies,” Kang said.

“Policies should also provide more comprehensive support for young borrowers, including debt adjustment as well as more tailored financial assistance,” she added.

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