[Op-Ed] New Student Loans

The Hollywood film “21” is about six MIT students who win millions in Las Vegas casinos through card counting. Ben Campbell, a young MIT student, interviews with a professor to receive the Robinson Scholarship. Eking out a living through part-time work, Campbell is desperate to earn a scholarship to finish his college education. The professor tells him, “The student who received the scholarship last year was a Korean immigrant without a leg. Are you willing to cut a leg off?” This illustrates that Asian students, who are renowned for high academic achievement, also earn scholarships.

Tuition at U.S. colleges is very high. Collegians in Korea protest annual tuition of 10 million won (8,130 U.S. dollars), but average annual tuition of private U.S. colleges and universities is 40,000 to 50,000 dollars. Because of this, 56 percent of American college students take out student loans. Hundreds of thousands of those who either drop out of school or fail to get jobs after graduation are behind in their loan payments, placing a huge burden on the government.

In Korea, a new student loan system to take effect next year will allow students to take out loans and repay them when their incomes reach a certain level. President Lee Myung-bak, who has pushed for the system, Thursday said, “College tuition will no longer be a concern.” Interest on the loans will not accrue when in college. In addition, students can take out additional loans of up to two million won (1,628 dollars) a year for living expenses. Since the system is mainly for students from low-income households, it will contribute to expanding educational opportunities. The people will ultimately shoulder the burden, however, because the government will finance the system by issuing state bonds worth 1.5 trillion won (1.22 billion dollars) a year.

The system is said to be modeled after similar programs in Britain, Australia and New Zealand. The three countries began lending money to college students after free college education was abolished. In a country where 83 percent of high school graduates go on to college, the Korean government cannot turn a blind eye to the suffering of the students and their parents due to high tuition. Given aggravating youth unemployment, however, fears are growing over a potential spike in student loan defaults. The government, however, has taken a drastic step toward helping poor students. The beneficiaries of the new system, therefore, should return the favor by repaying their loans without delay.

Editorial Writer Chung Sung-hee (shchung@donga.com)