The Korea Herald


Yoon to expand state-backed college student aid

By Son Ji-hyoung

Published : March 5, 2024 - 15:26

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President Yoon Suk Yeol attends a policy debate with some 460 participants in Gwangmyeong, Gyeonggi Province, Tuesday. (Pool photo via Yonhap) President Yoon Suk Yeol attends a policy debate with some 460 participants in Gwangmyeong, Gyeonggi Province, Tuesday. (Pool photo via Yonhap)

President Yoon Suk Yeol on Tuesday announced plans to expand state-backed scholarship programs to woo South Korea's young generation.

Yoon told some 460 participants in a policy debate held in the city of Gwangmyeong, Gyeonggi Province, that the government "has the responsibility to help the talented young generation live up to their capacity."

Yoon said the number of students eligible to get state-sponsored scholarships, provided by the state-run Korea Student Aid Foundation, will increase by 50 percent to 1.5 million, in a country home to 2 million college-goers at the undergraduate level.

Currently, any student from a household with an income double the median of all South Koreans is eligible to apply. Under the new plan, beginning next year, well-off students who came from families where they earn triple the median will also be eligible

Moreover, Yoon unveiled plans to establish a new scholarship program, so the government would support 2.4 million won ($1,800) to each student to help them cover the cost of housing.

The government did not specify when the new program would be launched.

This comes in line with the earlier budget plans in December for the government to spend 114 billion won. The Yoon administration aims to cover the full tuition fee for those in poverty and to increase the annual state-backed scholarship for worse-off students by 300,000 won or 500,000 won depending on their living conditions -- resulting in either 4.2 million won or 5.7 million won each year.

In addition, up to 200,000 students will be eligible for the state-run work-study scholarship program beginning next year, from the current 120,000. Earlier in December, the government sought to increase the number of eligible students to 140,000.

Yoon also laid out a set of measures to fill in policy holes, as the nation faces an uphill battle against its chronically declining fertility rate.

No tax burden will be shouldered on either a company or the employee when the company gives a lump sum of cash to an employee welcoming a newborn baby in his or her family. By September, the Finance Ministry plans to submit a tax code revision to the National Assembly. The revision is to be effective retroactively on all such allowances doled out beginning from January this year.

Tax bomb concerns surfaced as Seoul-based construction firm Booyoung announced plans in February to pay employees 100 million won ($75,000) every time they have a baby. The cash transfer could be construed as either an extraordinary remuneration or a gift, both of which are deemed taxable.

"No tax would be imposed at all on the allowance to the employees to encourage childbirth," Yoon said.

Moreover, single-parent families who retain the right to raise children after divorce will be immediately granted government subsidies for child-rearing. The government will cover the state expenditures by collecting the corresponding amount of money from the other parent.

The plan will benefit some 16,000 single-parent households, or a fourth of the families who split after having at least one child, according to the government.

The measures were part of the package unveiled Tuesday to provide state support targeted at younger generations. Over 50 policy goals were laid out to help youth become employed, gain wealth, improve their livelihoods and engage in policymaking activities.

More young people will be given greater access to mental health care and more chances to take part in human exchange programs in foreign countries, according to the package.