This paper examines the effect of the government college loan program in Korea on student academic performance, dropout decisions and loan defaults. While fairness in educational opportunities has been guaranteed to some degree through this program, which started in 2009, there has been a great deal of controversy over its effectiveness. Empirical findings suggest that recipients of general student loan (GSL) lower academic performance than those who received income contingent loan (ICL). Moreover, for students attending private universities, a higher number of loans received increased the probability of a dropout decision, and students from middle-income households had a higher probability of being overdue than students from low-income households. These findings indicate that expanding the ICL program within the allowance of the government budget is necessary. Furthermore, providing opportunities for students to find various jobs and introducing a rating system for defaulters are two necessary tasks.

　I. Introduction
　II. Developments in the Chinese Banking Industry and Changes in Bank Concentration
　III. Survey of the Literature
　IV. Model
　V. Empirical Analysis
　VI. Effect on Financial Stability
　VII. Summary and Conclusion