MONEY IS a sensitive topic as it touches upon multi-layered conflicts that we commonly suffer but struggle to openly discuss about. This is especially the case for university students who are now given more freedom in life compared to their teenage years. During this transitional period, students are overwhelmed with the sudden load of responsibilities they have to manage by themselves. With their first steps towards independence, students struggle to manage their finances as they enter university.

Unexpected financial issues

   As a teenager, getting accepted to one’s dream university seems to be the solution to all problems, yet it turns out to be only the start of new ones. One of the major problems students encounter is their inability to pay for all the needed expenses for university. A survey conducted by Alba Cheonguk, a job-search website, revealed that the overall average debt of individual university students is approximately ₩7.5 million[1]. The main reason behind students’ debt is related to their “academics”: 64% of the respondents stated they were struggling to pay off their student loan; 41.7% responded living expenses regarding transportation and food; 19.4% responded housing expenses such as monthly rents[1]. Out of all the university students in debt, the amount of student loans for low-income students is alarming. According to the “Status of Student Loans” data provided by the Korea Scholarship Foundation, low-income students have reached a total of ₩2.8 trillion student loans debt from 2017 to 2021[2][3].

   Several universities have dissolved their existing grade-based scholarship opportunities to in turn offer students from low-income families with better financial support. For instance, to expand the pool for need-based scholarship, domestic universities like Korea University and Sogang University discontinued their allocation of grade-based scholarships. However, such a decision brings mixed opinions. While some might argue that this reform is a step towards the provision of equal educational opportunities, others disagree, claiming that it unfairly takes away chances from the competent middle-class students. In an interview with The Yonsei Annals, Pinja Marie Hirvijaervi (Soph., Dept. of Media and Public Relations) stated that scholarship distribution has its limitations because it is based on the family income level, which is not applicable to all students: “I try to be financially independent from my parents as I feel that I have reached an age where I should be the one to support myself, so I am not too fond of the scholarship system being distributed based on household income,” Hirvijaervi stated.

Struggling on the road to financial freedom

   Unfortunately, as scholarship opportunities are not available to all, students need to find different ways to earn their living. In an interview with the Annals, Kim Jae-hee (Jr., Dept. of Economics, Sungkyunkwan Univ.), whose parents live abroad, said, “living alone requires more money than I had expected.” On top of paying for her monthly rent fees, Kim faced troubles during her first month of living alone. “I ordered all of my meals through delivery, which left me broke; since then, I try to cook my own meals,” she explains. To cover her living expenses, Kim worked part-time at an English hag-won[4], but the hag-won was more than an hour away from her apartment, which made each trip take a lot of time off studying. She ultimately had to quit the job because it started to negatively impact her school life. Despite her efforts to find nearby jobs, most required too many working hours and offered too low pay. She said, “I have been trying to save up these days and meet up with fewer people to cut down on living expenses.”

   Kim’s story is not atypical, as countless students have difficulties finding part-time jobs that fit their schedule, and the situation worsens for international students. Yuki Nakamura (Jr., Waseda University), a part of Hanyang University’s study abroad program, applied part-time at a Japanese restaurant. For international students to work in Korea, she first needed to get work documents from the restaurant to hand them into the university office. Once international students get the administration office’s approval to work, the immigration office requires them to submit additional documentation to issue a valid work permit, such as their school GPA and Test of Proficiency in Korean (TOPIK) scores. However, Nakamura stated, “the restaurant I applied for was not willing to get me the required documents before I had a go at working there—which would be illegal—so I decided not to take the job.”

   Such predicaments push international students to resort to other solutions. For example, international students like Hirvijaervi decide to go back and forth from their home country to cover their living expenses and tuition. Although parents saving up for their children’s university tuition is relatively common in South Korea, this is not the norm in other countries such as Finland, where university tuition is free. Hence, Hirvijaervi stated, “I usually go on longer breaks when I fly back to Finland to work so that I can keep financing my studies.” Things were even more problematic for her during her freshman year since international students have to pay higher tuition during their first-year enrollment. She hopes “to get a job here [in Korea] sometime soon so that I do not have to keep flying back and forth.”

Universities come to the aid

   To lighten students’ financial burdens, universities do offer a wide variety of scholarships. Yonsei University, for example, ensures students economically receive quality education through their student support team. The student support team oversees students’ scholarships and assists the student council and student group activities. When the Annals asked the student support team about scholarship opportunities other than the two well-known scholarships—merit-based and need-based—they emphasized students are often unaware of the full spectrum of scholarships the school offers, “we don’t think many students know about our shin-moon-go scholarship for example. Compared to other scholarships by the school, not many students apply for the shin-moon-go scholarship.”

   While there are strict criteria that students have to meet to receive scholarships, the shin-moon-go scholarship uniquely aims to support financially troubled students who have difficulties qualifying for national or need-based scholarships. The student support team claimed, “through an internal meeting and an interview with students, we select students who cannot exactly prove they are financially struggling through legal documents.” They also added that such detailed information on scholarships is only on Yonsei’s official website where they have a separate section of their scholarship page dedicated to related announcements.

   Alongside universities, the government is also sparing no effort to increase its scholarship budget. In August of last year, the Ministry of Education (MOE) announced that it would set the 2022 scholarship budget at ₩88.64 trillion, a 15.9% increase from last year’s budget[5]. The MOE decided to expand the national scholarship budget to ease the middle-class’s increased stress from education expenses during the pandemic. Accordingly, one million middle-class university students will be able to receive more than half of their tuition as national scholarships that students can apply for before the start of each semester through the Korea Student Aid Foundation’s website[5].

New methods of money-making

   Scholarship programs have expanded so that more students can benefit from such opportunities, but it is often the case that scholarships cannot fully cover students’ expenses. Universities also have a limited budget set aside for scholarships, which they cannot independently decide to expand without prior notice given to the government. Due to the prolonged pandemic and economic upheaval, students are searching for various new ways of making money. Diversifying their source of income is a distinct characteristic of the current youth—the MZ generation[6]—as they pursue making money quickly and practically. What sets the MZ generation apart is their tendency to learn more from financial experts on online platforms and social media than traditional finance courses.

   In a world of emerging technologies, many tech-savvy people—referred to as digital nomads—try to take advantage of convenient technological devices. Digital nomads are location-independent workers, meaning that they work remotely at home, cafes, or at co-working spaces instead of working at an office. They use digital devices such as laptops or tablets to perform their tasks as contract workers or freelancers. Working in a “gig economy[7]” is appealing not only to university students who want short-term commitments that do not disturb their studies but also to freshly graduated youths. According to a survey conducted by Gallup Korea in March 2021, 90% of the MZ generation preferred digital nomad working conditions rather than being committed to one job; as such, their numbers are expected to rapidly increase in the near future[8]. As a digital nomad, they can build an appealing work portfolio that lists all the different types of work they are capable of, all the while gaining various work experiences.

   A more familiar profit-generating method than the newly emergent digital nomads would be stock investment. Especially with the recent stock craze among the MZ generation, more and more university students are showing interest in stock shares. Yonsei Investment Group (YIG) is a stock club that strives to create next-generation investment experts. It is said that the competition rate to get into YIG has been increasing in recent years, with most of them being juniors or seniors[9]. RISK, Korea University’s Value Investment Research Association club, has also claimed the number of applicants increased from 40 to 50 students since the start of the fall semester of 2020[9]. Students’ growing interests have resulted in more students knocking on the door of their university’s stock clubs. In order to reduce the high risks of stock investments, university stock clubs present and discuss their detailed report analysis on firms during their regular sessions.

   Although stock investments can appreciate, they are riddled with uncertainty, so some youths turn to “Art-tech” as an alternative to stock investments. Art-tech is a coined word used in Korea that means making a joint-purchase of artworks such as paintings and designs of famous artists to make a profit from the investment. Art-tech is considered a safer investment method than others because investors can more definitely expect profit from their investments. If the transfer price of the artwork is less than ₩60 million, it is tax-free[10]. Drawn in by the industry’s exceptionally attractive features, many youths have entered the art market, drawn into Art-tech’s attractive features. Money-making for today’s youth is taking a new turn, and it is evident that they are taking great advantage of such opportunities.

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   Many university students carry the burden of having to keep themselves financially afloat and scourge for different outlets for sustenance, whether it be through scholarships or working part-time. They now seem to have found more clever ways to earn money. Although settling on the current trends of joining the gig economy will bring partial success, students should venture out and establish their own ways of achieving financial freedom and remember that the traditional support system by universities or the government are still viable. Yet, it seems most likely that a new wave within the labor market will instigate the growth of even more unique platforms that satisfy the needs of the current and future youth.

[1] DongA News

[2] The data defines low-income students to be below the third quintile in household income distribution.

[3] Maeil Business Newspaper

[4] Hag-won: A Korean word that refers to for-profit private educational institutions prevalent in Korea

[5] Yonhap News

[6] MZ Generation: A term that refers to both the millennials born between 1980 and 1995 and Generation Z born between 1996 and 2010.

[7] Gig Economy: A free market system where temporary positions and contracts are commonplace

[8] Hankook Ilbo

[9] Maeil Business Newspaper

[10] Money Today