Korea Student Aid Foundation
Overview
The Korea Student Aid Foundation (한국장학재단, Korea Student Aid Foundation) is a public institution under the Ministry of Education of South Korea, established to expand opportunities for higher education and reduce the burden of tuition fees by providing national scholarships, student loans, and work-study scholarships to undergraduate and graduate students. Since its founding on May 1, 2009, the foundation has provided financial support to millions of students annually, establishing itself as a representative educational welfare institution in Korea. The foundation's main goal is to create an environment where all students can focus on their studies regardless of their economic circumstances.
Main Content
Establishment Background and Legal Basis
The Korea Student Aid Foundation was established under the "Act on the Establishment of the Korea Student Aid Foundation" (Act No. 9296). In the mid-2000s, the sharp rise in university tuition fees and increase in household debt highlighted the need for student financial aid, and the government deemed it necessary to integrate the existing fragmented scholarship and loan systems into an efficiently operated institution. Accordingly, the Korea Student Aid Foundation was launched in 2009, taking over student loan operations previously managed by the Korea Housing Finance Corporation and others.
Major Projects
The core projects of the Korea Student Aid Foundation are broadly divided into three categories.
1. National Scholarship
The National Scholarship is a system that provides partial tuition support to university students in income brackets 1 to 8, implemented since 2012. Support is provided differentially based on income bracket, with students in bracket 1 (basic livelihood security recipients) receiving up to 5.7 million won annually, and those in bracket 8 receiving approximately 670,000 won. As of 2024, the National Scholarship budget is approximately 4.5 trillion won, benefiting about 1.5 million students.
2. Student Loans
The foundation operates both general repayment student loans and income-contingent repayment student loans (ICL). General repayment loans have a fixed interest rate (1.7% as of 2024), with interest-only payments during enrollment and principal and interest repayment after graduation. Income-contingent repayment loans begin repayment only when income exceeds a certain level (annual income of 24 million won as of 2024), alleviating the burden on low-income students. As of 2023, the total outstanding student loan balance amounts to approximately 20 trillion won.
3. Work-Study Scholarship
The Work-Study Scholarship is a system where students engage in work activities on or off campus and receive scholarships in return. It is divided into on-campus work (libraries, administrative offices, etc.) and off-campus work (public institutions, companies, etc.), with an hourly rate of 11,000 won as of 2024. Priority opportunities are provided to students from vulnerable groups, such as multicultural families and persons with disabilities.
4. Other Projects
- Talent Development Scholarship: Selects and supports outstanding talents in specific fields such as science and engineering, humanities and social sciences, and arts and physical education.
- Regional Talent Scholarship: Encourages high school students in non-capital areas to attend university.
- Student Loan Repayment Deferment: Provides temporary deferment for those unable to repay due to military service, illness, unemployment, etc.
Application Process
Students apply through the Korea Student Aid Foundation website (www.kosaf.go.kr) for integrated applications. The first and second application periods occur in January and July each year, and eligibility is determined after income and asset verification. Loans are executed after separate screening.
Organization and Finances
The foundation consists of a chairman (currently Son Dong-hwan, appointed in 2023), executives including an auditor, and five headquarters (Scholarship Business Headquarters, Loan Business Headquarters, Management Support Headquarters, etc.). As of 2024, the number of employees is approximately 800, and operational funds are covered by government contributions, donations, and recovery of loan principal and interest.
Recent Trends
In 2024–2025, the Korea Student Aid Foundation is focusing on digital transformation and strengthening customized support.
- Digital Platform Overhaul: In March 2024, the mobile app 'KOSAF' was completely revamped, introducing an AI-based counseling chatbot and simplifying loan application and repayment procedures. In 2025, a blockchain-based student loan contract system will be piloted.
- Income Bracket Expansion: Since 2024, a plan to expand the National Scholarship income bracket from the existing 8 brackets to 9 brackets (up to 200% of median income) has been under discussion, with implementation targeted for 2025.
- Improvement of Income-Contingent Repayment Loans: In July 2024, a bill was submitted to the National Assembly to raise the repayment threshold income from 24 million won to 26 million won annually and extend the maximum repayment period from 25 years to 30 years.
- Post-COVID-19 Support: The student loan delinquency rate decreased from 3.2% in 2023 to 2.1% in 2024 after the pandemic, but delinquencies still occur mainly among low-income groups, leading the foundation to expand customized counseling programs.
- ESG Management: In 2024, the foundation declared a carbon neutrality goal and is pursuing a 100% renewable energy transition for office electricity.
Related Topics
- [[National Scholarship]]
- [[Student Loan]]
- [[Ministry of Education]]
- [[University Tuition Fees]]
- [[Income-Contingent Repayment Student Loan]]