Property of student-loan defaulters to be confiscated
The government will confiscate the property of students those who haven’t repaid state loans three years after they graduate.
The Ministry of Education and Science and Technology said Wednesday that it will audit collegians who have benefited from the government’s loan program if they fail to repay the money within three years of graduation.
“Current rules also enable us to seize land, housing and financial asset of the borrowers, but there is a possibility that debtors could conceal their assets, so we will expand the categories,” a ministry official said.
Under the new regulation, effective from next year, the ministry will be able to seize assets of college graduates in debt, such as overseas real estate, condominiums or fitness club memberships.
The confiscated assets will be disposed of by the tax authority.
Those subject to an audit will receive prior notice and if they pay back more than 5 percent of their debt, they will be given a grace period.
The government began providing financially-strapped students with “study-now-pay-later” loans to pay for tuition early this year. Under the long-term program, college students are required to pay back their loans after graduating and landing a job.
However, it has invited criticism that government-led loans could turn sour on a large scale if borrowers fail to find a job or default on their payment obligations.
In the meantime, the ministry also revised a law so that collegians can get a refund of their tuition fees if they are expelled from school.
The changed law will also regulate colleges to provide students with scholarships amounting to over 10 percent of their total tuition income and more than 30 percent of the scholarships should be given to students from low-income families.
By Kang Shin-who
The Ministry of Education and Science and Technology said Wednesday that it will audit collegians who have benefited from the government’s loan program if they fail to repay the money within three years of graduation.
“Current rules also enable us to seize land, housing and financial asset of the borrowers, but there is a possibility that debtors could conceal their assets, so we will expand the categories,” a ministry official said.
Under the new regulation, effective from next year, the ministry will be able to seize assets of college graduates in debt, such as overseas real estate, condominiums or fitness club memberships.
The confiscated assets will be disposed of by the tax authority.
Those subject to an audit will receive prior notice and if they pay back more than 5 percent of their debt, they will be given a grace period.
The government began providing financially-strapped students with “study-now-pay-later” loans to pay for tuition early this year. Under the long-term program, college students are required to pay back their loans after graduating and landing a job.
However, it has invited criticism that government-led loans could turn sour on a large scale if borrowers fail to find a job or default on their payment obligations.
In the meantime, the ministry also revised a law so that collegians can get a refund of their tuition fees if they are expelled from school.
The changed law will also regulate colleges to provide students with scholarships amounting to over 10 percent of their total tuition income and more than 30 percent of the scholarships should be given to students from low-income families.
By Kang Shin-who
No comments