On July 14^th, the Korean government (the gov) newly announced the “Special debt adjustment system for young adults.” It includes “Payment deferment of the principal payment for up to 3 years” and “Interest payment reduction up to a maximum of 50%” to people below 35 years old with low credit[1] who lost money by investing in stocks or virtual assets. However, its justice is vague. The gov should not cancel debt for people who overinvested despite having known risks.

        The purpose of this policy is to prevent young adults with low credit from being “debt delinquents” due to interest payments and help them become productive members again. However, some argue that this purpose is unrealistic. Park Chang-gyun, the Head of the Office of Research Coordination of the “Korea Capital Market Institute” said that he thought there would be no enormous effect since the policy only makes interest payment reduction which postpones debt in arrears without a write-off of the principal. Also, many regards it as negative. Real Research Korea surveyed 3,806 adults in Korea from July 18^th to 23^rd, asking if they agreed with the “Special debt adjustment system for young adults can be reverse discrimination against people without debts.” 67.6% of respondents showed negative opinions agreeing with it. Even, it is difficult to exclude people who can exploit this policy after using loans to invest as “Credit Counseling & Recovery Service” cannot check how they used loans that they failed to pay back. So, those who diligently paid back their loans cannot help having doubt about the fairness of this policy in this situation. In addition, the expectation about the recovery of the stock market becomes greater since KOSPI reached 2,400 in July. It means that the number of people who overinvested with debt can increase as investor sentiment, including investing with debt, can revitalize. In the interview of the JoongAng Ilbo in July, many citizens said they could not understand why the gov has responsibility though the investments depend on individuals. Plus, this policy can lead to a moral hazard problem[2]. Kim Joo-hyun, the chairman of the Financial Services Commission announced that they will minimize the moral hazard problem by strictly limiting the targets and contents for support at the evaluation. However, concern about it still exists when the subject’s criteria of debt adjustment are obscure.

        In the interview of Sisajournal in July, a thirties diligent office worker said “I feel skeptical when the debt of people invested with loans becomes decreased, while taxes that diligent workers who get a monthly salary must pay are increasing.” The gov should make effort like trying to find out how the applicants used loans by working with relevant institutions. Thus, it is inappropriate for the gov to cancel debt for people who overinvested while its effect is unclear.