National Happiness Fund : Debt Restructuring for Student Loans


As the tuition fee rises faster than incomes and inflation, the large amount of the tuition fee has become a huge burden to many university students in Korea. The concern for high costs of the tuition fee has been voiced repeatedly, yet students still struggle to pay their tuitions. According to the Korea Research Institute for Vocational Education and Training, about 30% of college graduates are student loan borrowers and their average student loan debt is about 9,010,000 won. The statistic has shown that it normally takes around 4 years to pay off the whole debts. As a way of supporting those borrowers who are still struggling from their loans, the Financial Services Commission (FSC) came up with a new supportive program for students and graduates who owe student loan debts.


Under the National Happiness Fund, the new debt relief program designed for defaulters, student loan borrowers who are at least 6 months delinquent can delay their repayment or reschedule their debts. Moreover, the National Happiness Fund will help young jobseekers to find a job by providing support programs. Considering the number of student loan borrowers in Korea, this new system is expected to help many young jobseekers that do not have ability to pay off their loans as well as university students who are currently using the student loans.

Let’s check out the details about this program. The following questions of student loan borrowers will help you to understand how the new program would work. .


The debt rescheduling program will be applied by purchasing overdue loans from the Korea Student Aid Foundation. All the bonds that are on delinquency for more than 6 months will be regarded as bad debts and will be purchased by the National Happiness Fund. Furthermore, student loan borrowers will be able to delay the repayment of their debts until they get a job or they can have deductions on their debts at graded rates based on their repayment ability. The Student Aid Foundation and other financial institutions will also provide chances to reschedule students’ debts following the steps of the National Happiness Fund.



The National Happiness Fund also provides an employment program to beneficiaries of the Fund. The Ministry of Employment and Labor offers an employment support service package in the cooperation with the National Happiness Fund. The beneficiaries of the Fund will be able to use services of the package following each step. The consulting service will be offered to beneficiaries at first to encourage their will and set a career goal. Then they can improve their work competencies by participating in different career programs. If the beneficiaries complete all these steps, the National Happiness Fund will offer a job placement service. In addition the National Happiness Fund will provide a subsidy to employers if they hire the participants of the programs.


The National Happiness Fund will offer educational systems to want-to-be business founders collaborating with the Small and Medium Business Administration (SMBA). The participants in this program will be able to learn about the process of establishing a business with 95% of program fee covered by the government. For those who are struggling with running their own business, the National Happiness will provide business consulting programs through the SMBA. Furthermore, the student loan borrowers will be given chances of getting Micro-Credit loans if they diligently pay off their debts after the debt rescheduling. If they satisfy this one condition, they will be able to get Micro-Credit loans not only for life expenses but also for opening a business.

Experts assume that about 326,000 of student loan delinquents will benefit from the National Happiness Fund. The application for the National Happiness Fund will be open to graduates in July. Although the National Happiness Fund is designed to give delinquents a new chance to live debt-free life, the beneficiaries should always remind him- or herself about the meaning of this relief program. Do not make this chance meaningless. A new life comes with a greater responsibility.

By Ju Eun Kim (


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