Financial Supervisory Service activates three measures to support students
The Good School Expenses Loan in Korean is a type of student loan that is provided by the Life Insurance Society Contribution Committee and supported by the FSS. It aims to help students who are suffering from high interest loans, who are in economic distress and need money to pay for tuition. Students with a GPA (Grade Point Average) of C and above and in a household with an income of less than 4.5 million won per month can apply for this loan and receive up to 10 million won at an interest rate of 1.5 percent.
“We are strengthening public relations on this loan to support the Korea Life Insurance Association giving financial help to university students,” said an official of the Supervision of Insurance at the FSS who wishes to remain anonymous.
According to the official, the insurance association has a fund worth 20 billion won that can be loaned out at low interest rates. However, only 4 billion won has been used so far, since not as many students as expected applied for this loan.
In fact, only 600 students used the Good School Expenses Loan last year and 270 for the first half of this year. Thus, the FSS decided to advertise the loan more extensively to have more university students apply. The FSS’s goal is to provide up to 20 billion won, which will help approximately 2,500 or more university students.
The FSS is also helping students who received high interest loans from lenders and savings banks convert to ones with low interests. The FSS sent official documents to all the universities to introduce the loan and let insurance companies recommend the loan to their related clients, thereby introducing more possible solutions for students’ financial burden.
In addition, the FSS is promoting guidance on credit card payment of tuition. Students can pay on installment plans when paying the tuition by credit card, which gives students and parents more time to save money.
However, this preferred way of payment is not yet possible in all universities. This year, 124 out of 431 schools, which accounts for only a quarter of Korean universities, allowed students to pay their tuition using credit cards. Universities are hesitant to start receiving tuition by credit card because of the commission they have to pay to credit card companies. While some universities, including Ewha, accept two kinds of credit cards, which have different installment plans including long plans of up to 10 months, most universities allow only one type of credit card.
Currently the FSS is trying on setting a reasonable commission rate that is acceptable to universities which do not accept credit card payment for the moment.
“I wish my school also allowed students to pay tuition by credit card,” Choi In-young (Hankuk University of Foreign Studies, 4) said. “There may be a commission issue, but it can be resolved by letting students partly pay for the commission. Having varying payment methods will relieve students’ burden.”
The FSS is making efforts to have universitites accept tuition by credit card. However, it says the decision cannot be simply made by the FSS as it is more directly related with card companies and universities.
“We have also been having meetings with the Ministry of Education, Science and Technology to solve this problem together,” said an offical from the FSS who wishes to remain annonymous. “Now we hope universities that do not accept credit cards yet can see the importance and decide to change their minds.”
Ahn In-kyeong
iahn@ewhain.net