South Korea's student loan debt tops W2tr as youth unemployment deepens
New data from the Korea Student Aid Foundation reveals that student loan borrowing surged to 2.11 trillion won ($1.44 billion) in 2024, the highest figure in nine years. This marks an 11 percent jump from the previous year's total of 1.89 trillion won. The last time borrowing exceeded 2 trillion won was in 2015.
The spike comes as job opportunities for young people are drying up. According to Statistics Korea, the number of employed South Koreans aged 15 to 29 fell by 173,000 in June compared to the same month last year. Youth employment has declined for 32 consecutive months.
The Ministry of Employment and Labor reported that in June, there were only 39 job openings for every 100 job seekers, the lowest ratio for that month since the 1997 financial crisis.
At the same time, student loan defaults are increasing. The number of borrowers behind on payments for standard repayment loans reached 24,587 in 2024. That's a 14 percent rise from the previous year and nearly 50 percent more than in 2021, when 16,669 borrowers were in default.
KOSAF operates two main loan programs. Income-contingent loans postpone repayment until a borrower's income exceeds a threshold, while standard loans require repayment on a fixed schedule, regardless of employment. The latter has seen especially steep growth. Standard loan borrowing rose by 43.4 percent over the past three years, from 860.9 billion won in 2021 to 1.24 trillion won in 2024. ICL borrowing increased more modestly, from 795.3 billion won to 876.1 billion won in the same period.
South Korea's leading job platforms are reporting steep drops in hiring. JobKorea said job postings from January to May were down 24.1 percent from a year earlier. Job ads specifically targeting recent college graduates fell 20.6 percent.
A March survey by Incruit, another recruitment site, found that only 65.6 percent of companies had confirmed hiring plans, the lowest figure in three years.
But KOSAF attributed the rise in loans to low interest rates and expanded eligibility policies, including extending ICL eligibility to graduate students in 2022. Local governments have also increased support, such as Gyeonggi Province's interest subsidy program, which has benefited over 430,000 students since 2010.
Meanwhile, tuition is rising. South Korea's four-year universities raised tuition by an average of 4.1 percent in 2025. The OECD reported that government spending covered only 43.3 percent of higher education costs in South Korea as of 2020, far below the OECD average of 67.1 percent. The rest falls mostly on individuals and families.
In contrast, the wage premium associated with having a college degree remains low. University graduates earned 134.9 percent of the wages of high school graduates in 2021, trailing the OECD average of 142.6 percent for that ratio.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
![[Weekender] Why more Koreans are becoming side hustlers](/_next/image?url=https%3A%2F%2Fwimg.heraldcorp.com%2Fnews%2Fcms%2F2025%2F07%2F24%2Fnews-p.v1.20250717.128ea27de6324beab3050f9da0294586_T1.jpg&w=3840&q=100)
![[Weekender] Why more Koreans are becoming side hustlers](/_next/image?url=https%3A%2F%2Fall-logos-bucket.s3.amazonaws.com%2Fkoreaherald.com.png&w=48&q=75){kind=small}
Korea Herald
2 days ago
- Korea Herald
[Weekender] Why more Koreans are becoming side hustlers
Money matters the most, but hope of career change also drives the trend Kim Sol-nim, 33, writes blogs for hospitals and law firms after returning home from her main job at around 6 p.m. She spends one to four hours daily on side work, earning between 600,000 won and 800,000 won ($430-$575) per month as extra income. She used to run an Airbnb and gave weekend lectures related to her current job in insurance in the past. Now, she is preparing a pet furniture design business with friends. This does not mean that she plans to quit her main job anytime soon. Her main job provides health insurance, retirement benefits and job stability, which are benefits she is unsure her freelancing income can offer long-term. Kim considers herself an 'N-jobber" — someone who has or is seeking to have multiple jobs. 'The biggest reason for having side jobs is money," she told The Korea Herald. "My salary from my main job is not insufficient for my living expenses, but it's nowhere near enough to buy a house in Seoul." She is one of many South Koreans who are taking on, or considering taking on, side hustles. For those interviewed by The Korea Herald, money was the top motivator, but workers also cited a desire to try new things and discover what they truly enjoy. Experts say the trend is likely to accelerate amid soaring prices and growing job instability — a shift partly driven by rapid technological changes, including the rise of artificial intelligence. Money matters the most Multiple surveys have shown that a growing number of salaried Koreans are engaging in side hustles. According to a survey by the local classifieds outlet Flea Market in August, 82.1 percent of 1,327 salaried workers said they were either doing or considering side jobs. The top reason was low salaries (55.1 percent), and the most popular type of work was social media content creation, such as blogging or YouTube (20.2 percent), with average earnings of about 620,000 won per month. A separate report by KB Financial Group in November found that 54.8 percent of 2,000 salaried workers were engaged in side jobs — up 12.8 percentage points from the same survey in 2022. The most common reasons included saving for emergencies (38.7 percent), using spare time (18.7 percent) and covering living expenses (13.2 percent). Like Kim, many salaried workers find it hard to survive in Seoul, where consumer prices are high and housing costs are skyrocketing. The average price of an apartment unit in July was 1.46 billion won, according to Real Estate 114. The average Seoul worker's annual salary is around 48 million won. In a simple calculation, even saving an entire salary for 30 years would barely be enough to buy a home. Lily, who asked to be identified only by her English name, also juggles multiple side hustles. In her 30s, she has tried blogging, food delivery on foot and leading online group activities like book clubs through platforms such as Trevari. 'When I saw people earn a lot of money through stocks and coins, I always regretted not doing the same,' she said. 'But I don't have the courage to take that kind of risk. So I began having side jobs.' 'My main job is stable, but wage increases are minimal. Instead of switching jobs, I started side hustles,' she said. Career transition Some also take on side jobs to safely transition from an unsatisfying main occupation to another job they truly enjoy. A 37-year-old engineer at one of Korea's top conglomerates — who writes under the pseudonym Amtun on the blogging platform Brunch — has tried several side hustles over the years. 'I worked really hard, but one day I had a reality check,' she said. 'I was running fast in the corporate race, but I was hit by a sense of emptiness. It made me question whether spending my time like this was really worth it. So I began to let go of the company a little and started looking for a better work-life balance.' She bought an 80 million-won fixer-upper in Gangwon Province and converted it into an Airbnb. 'I love traveling, and I always enjoyed staying in Airbnbs overseas,' she said. 'I only take one team every two days, and I let them check out late in the afternoon.' Living in Seoul, she hired someone to clean the property and handled only the reservations herself. She earned about 7 to 8 million won a year from it until recently, when she gave birth to her first child. 'This was something I truly enjoyed and found meaningful, so I didn't feel as tired. I used to run a blog and act as a proxy for overseas shopping orders, but those felt like having a second full-time job.' She said she would consider quitting her day job if her side hustle income grew. 'Running an Airbnb offers more than just income. It gives people a space to rest and connect. That means something to me.' Lee Byung-hoon, honorary professor of sociology at Chung-Ang University, said the phenomenon stems from both financial and cultural factors. 'First, people take on side jobs because they are dissatisfied with the income or meaning they get from their main job and want to prepare for something new,' he said. 'Second, people no longer see their main jobs as lifelong careers. They're mentally prepared to leave when the time feels right.' Lee also pointed to deeper societal roots. 'Korea's education system doesn't help people figure out what they enjoy. So many only start asking those questions after they've entered the workforce,' he said. From an employer's standpoint, this trend may not reflect ideal work ethics, Lee noted. 'Companies want their employees to rest after hours." However, the trend is expected to accelerate. Unlike in the 20th century, jobs today are less secure and are disrupted by advances like AI. More people will likely move around based on job opportunities instead of staying with one company for life, he said. According to The Korea Herald's analysis of microdata from Statistics Korea's Economically Active Population Survey, 677,300 people said they had worked a side job in the past week as of June — a 35 percent jump from 498,440 in June 2015. shinjh@
Korea Herald
4 days ago
- Korea Herald
For 1st time, more jobless college grads than middle school grads in South Korea
More South Koreans with college degrees are now out of the workforce than those who only finished middle school. It is the first time this has happened, and it reveals a growing fault line in the country's labor market. New data released by Statistics Korea on Tuesday showed that 3.048 million people aged 15 and older with a four-year university degree or higher are not working and not looking for work. That number now slightly surpasses the 3.03 million among those whose education stopped at middle school. Just 10 years ago, the gap between these groups was more than 1 million in the opposite direction. The shift reflects a wider imbalance. South Korea has one of the world's highest university enrollment rates, but the job market has not kept up. Many recent graduates are preparing for exams, stuck waiting for job openings or have left the labor market entirely. They are statistically classified as 'non-economically active,' meaning they are not employed or actively seeking a job. Behind the numbers is a tight hiring environment. According to a 2025 survey by the Korea Enterprises Federation, only 60.8 percent of large companies said they planned to hire new staff this year. That is the lowest share since 2022. College-educated job seekers tend to target high-value sectors like tech or finance. But growth in these areas has slowed. That slowdown is forcing many graduates into limbo, especially as entry-level positions shrink. South Korea's service industry offers little relief. A July report from the Bank of Korea found that labor productivity in domestic services, including IT and retail, was just 39.7 percent of the manufacturing sector in 2024. That ratio has barely moved in 20 years. Compared to other countries, the gap is just as wide. According to the BOK report, South Korea's service-sector productivity measured only 51.1 when indexed against the United States at 100. The OECD average was 59.9. Germany reached 59.2. Japan stood at 56.
![[Lee Jae-min] Calm thinking on quiet quitting](/_next/image?url=https%3A%2F%2Fwimg.heraldcorp.com%2Fnews%2Fcms%2F2025%2F07%2F23%2Fnews-p.v1.20250723.9b94e8f4957642dda95f20974e121eea_T1.jpg&w=3840&q=100)
Korea Herald
4 days ago
- Korea Herald
[Lee Jae-min] Calm thinking on quiet quitting
Korea still works hard. The country is known for its long working hours. A recent OECD survey in April 2025 puts Korea at No. 5 out of 38 countries surveyed with 1,900 hours per year per person. On top of that, Korea has long championed a strong work ethic with which people are educated and told to "do their best" on the job. The "do-your-best" mentality arguably underpins the economic success story of the resource-scarce country. Korean workplaces are now seeing seismic changes in this "hard work" culture. It would be another 'back-in-my-days' story that becomes easy gossip material for young colleagues over their lunch that day. Obviously, the young generation thinks differently. As people half-jokingly say, three questions when Millennials and Generation Z staff are asked to do something to which they do not fully subscribe are: 'You mean this?,' 'You mean me?' and 'Why should I?' in sequence. So, they need a particular reason to do the work. The changing workplace culture in the country slowly spreads the term "quiet quitting." It is a phrase coined a couple of years ago in other countries to describe a situation where people do not resign, but do the minimum on the job. It means employees stay on the job passively even if they do not quit outright. According to a survey conducted by local job portal Incruit in March 2024, 51.7 percent of respondents, many of whom were from younger generations, said they were in the mode of quiet quitting. Presumably, other countries are seeing a similar trend as well. According to Gallup's State of the Global Workplace 2025, 79 percent of employees globally are either not engaged (62 percent) or actively disengaged (17 percent) from their work or organization, both situations that might fan quiet quitting. In East Asia, the rate stands at 82 percent (65 percent plus 17 percent). In Korea, debates are ongoing; there is a growing tension between those who expect more contribution on the job versus those who are ready to do just what is required of them. Emails and posts abound with leadership enhancement materials and coaching skills to kill the quiet quitting trend and galvanize the communal spirit at the workplace. Come to think of it, perhaps the concept of quiet quitting has persisted through human history. Bad bosses are steadily plentiful. Toxic human relationships and unreasonable decisions are rampant in the workplace. No wonder learned helplessness seeps in with frustrated people poised to do the bare minimum. Even under a good boss and in a friendly work environment, many of us frequently struggle between doing our best and doing the minimum, striving to ride out the day and the month to stay afloat at work. People don't just go full speed constantly. So, quiet quitting may not be a new phenomenon, but another label for an old social interaction that remains within socially acceptable parameters. The difference seems to be that people are now more open about it, and sometimes make it public. Quiet quitting, however, apparently has its limit. When it degenerates into avoidance of required work and failure to complete the mandate, that seems to be a different story. Quiet quitting in that case does not do the bare minimum; instead, it holds the entity back. It is like someone throwing in a pinch of sand into a machine every now and then. Many a day will go unnoticed and uneventful, but there will come the moment when a single grain of sand brings the machine to a halt. There may be cases for both, and each case is different indeed. Sometimes, it can be hard to tell which is which. A critical point of note for the Korean workplace from the quiet quitting dialogue is the need for a transition from a nuanced culture of unwritten rules to clear job descriptions. Nuanced communication, unwritten norms and implicit codes of behavior once conducted Korean workplaces like a well-orchestrated symphony. That culture has undergone significant changes, but still lingers on here and there — sometimes yes and no are not entirely clear, and nudges and prods from company superiors are hard to decipher. Short on specifics and ambiguous, the nuance culture does not really present a reliable guideline in today's offices and cubicles. Doing the best and putting company matters first are the representative snapshots of the traditional work culture. The younger generations would not buy such subtle nuances. Nor would they like to be jerked around by bosses and seniors. They would expect to see clear rules and distinct boundaries. So, in the Korean context, the quiet quitting discourse may offer an occasion for healthy debates on drawing a boundary between work and personal life. Work-life balance and work-rest balance are ever more important for individuals, companies and organizations in Korea. The discourse may also usher in an environment of clearer and more detailed job descriptions. As long as an employee completes the task promised, that should be sufficient — it would be too much to expect something more than that. If doing the best is required, or doing whatever is necessary is necessary, a different compensation package or incentive arrangement may be needed. In sum, motivation triggers for younger generations in today's workplaces in Seoul: clear job description, fair evaluation and proper compensation, together with after-work freedom to mind their own business. Long working hours and abrasive "give-me-your-best" pressure will drive them further into the cave of quiet quitting.
