A growing number of South Koreans in their 20s and 30s who found jobs after graduating and then lost them are failing to repay their student loans, data showed. A tight job market is delaying entry into the workforce and pushing debt burdens into borrowers' 30s.
A total of 8,475 borrowers in their 30s won approval to defer repayment under the income-contingent student loan program in 2025, according to National Tax Service data obtained by Rep. Park Soo-young of the People Power Party and released on the 23rd. That was up more than 15% from 7,346 a year earlier and the highest figure on record.
Deferrals are rising faster among borrowers in their 30s than among those in their 20s. Borrowers in their 30s numbered 7,346 in 2024, surpassing those in their 20s at 6,587 for the first time, and last year the gap with borrowers in their 20s, at 6,190, widened to nearly 2,300. It is the first time a breakdown of deferrals by age group has been made public.
Under the income-contingent loan program, borrowers are billed for repayment based on their income level once their annual earnings exceed a set threshold. Deferral allows those who were billed based on earlier income but have since lost that income — through job loss, business closure, resignation or parental leave — to postpone payment.
Borrowers in their 30s also accounted for a larger share by amount. Of the 24.33 billion won in total deferred payments last year, 15.019 billion won, or 61.7%, came from borrowers in their 30s. Those in their 20s accounted for 8.926 billion won.
The problem is that in many cases postponing repayment does not resolve the debt burden. The number of borrowers approved for deferral twice or more in a single year rose 2.7-fold to 1,320 last year from 488 in 2021. The amount they deferred rose 3.2-fold over the same period, to 3.861 billion won from 1.216 billion won. Of the 7,892 borrowers granted two-year deferrals in 2022 on grounds of financial hardship, 1,263 were in arrears as of the end of 2025 — one in six.
Analysts attribute the rise in deferrals among borrowers in their 30s to the later age at which young people now enter the labor market. The share of those aged 20 to 34 who took more than a year to land their first job rose to 33% in 2025 from 29% in 2020, according to the National Data Agency. As of May this year, the average time college graduates took to complete their degrees stretched to four years and 5.7 months, up 1.3 months from a year earlier and the longest since the data series began in 2007.
Employment among people in their 20s has posted its worst performance in years. Data from the Korean Statistical Information Service showed an average of 3.279 million people in their 20s were employed each month from January through August this year, down 193,000 from 3.472 million in the same period a year earlier. That was the steepest drop since 1998, when the country was in the grip of the Asian financial crisis, when employment in the age group fell by 550,000. Even accounting for a shrinking population, jobs are disappearing faster than the population is declining.
"As companies scale back mass hiring rounds and shift toward recruiting experienced workers, the number of jobs open to young people is shrinking," said Kim Ji-woon, a professor of economics at Hongik University. "The decline in entry-level hiring at home and abroad since the spread of AI also appears to be a compounding factor."
More young people are leaving the labor market after holding a job. The number of people aged 20 to 34 with work experience who were classified as "resting" rose to 477,000 in 2025 from 360,000 in 2019, according to the Bank of Korea. The share of "resting" among those aged 30 to 34 outside the labor force climbed to 30.7% from 15.8% over the same period. The central bank found that most of those classified as "resting" who left a job within the past year did so voluntarily, citing personal or family reasons or dissatisfaction with working conditions, but that involuntary departures began rising again in 2024 amid the economic slowdown.
"The fact that deferrals are now more common among borrowers in their 30s than those in their 20s means more young people are unable to repay debt even at a stage when their employment and income should be stable," Park said. "The employment and livelihood conditions young people are experiencing warrant serious attention."
