Over 400 soldiers sought debt relief last year as gambling, crypto risks grow

More than 400 soldiers on active duty sought debt restructuring last year after falling behind on their obligations, as rising exposure to online gambling, leveraged investing and virtual assets has pushed the government to overhaul financial education for military personnel. Outstanding loan balances from licensed lenders to soldiers have surpassed 40 billion won ($29.1 million), prompting authorities to act.

According to the Financial Services Commission, 432 service members received formal debt restructuring — including fast-track adjustments, pre-emptive restructuring and personal workouts — through the Credit Counseling and Recovery Service last year, with the total support amount reaching 10.2 billion won. In 2023, 443 service members received 9.3 billion won in debt restructuring, and in 2024 another 443 received 10.6 billion won.

Borrowing from regulated lenders has also been substantial. The combined military loan balance held by the top 30 registered money lenders under FSC oversight stood at 44.4 billion won at the end of last year. The FSC said that as soldiers take on greater direct control of their financial assets, "the risk of military personnel being exposed to high-risk investments such as online gambling and virtual assets, illegal financial investment information, and high-interest loans is also growing."

The concern is that as the sums soldiers handle have grown, so too has the potential damage from poor financial decisions. This year's monthly pay stands at 750,000 won for privates, 900,000 won for private first class, 1.2 million won for corporals and 1.5 million won for sergeants. A soldier who contributes the maximum amount each month for 18 months to the military savings account program can accumulate about 20.19 million won, combining personal contributions, government subsidies and interest.

In response, the FSC convened its second Financial Education Council meeting Monday and approved a plan to strengthen financial education for military personnel, developed in coordination with the Ministry of National Defense, the Financial Supervisory Service and other relevant agencies. The core of the plan is a shift away from one-way lecture-style instruction toward a system in which soldiers actively assess their own financial situations and seek solutions.

The plan calls for expanding one-on-one financial counseling for service members. Both remote and in-person counseling channels will cover topics ranging from pay and expense management to savings planning and lump-sum fund management, tailored to each individual's circumstances. Soldiers with credit or debt problems will be able to check their status online before receiving follow-up phone counseling. Those dealing with debt issues they are reluctant to disclose publicly can use a private, military-only message board operated by the Credit Counseling and Recovery Service.

Particular attention will be paid to online gambling, leveraged investing — commonly known as "debt investing" — virtual assets, leveraged financial products and high-interest loans, which will be treated as distinct risk categories. Financial investment firms will visit military bases directly to educate troops on real cases of financial harm and how to respond, and will also offer investment and asset management consultations. Dedicated video content and educational materials for service members will be produced, covering illegal gambling prevention and credit management.

Gambling within the military has also emerged as a serious concern. According to Army headquarters, 313 soldiers — 20 officers and 293 enlisted personnel — were booked by military police last year on charges of online gambling. The Defense Ministry is also considering a voluntary self-reporting system under which soldiers who come forward about illegal gambling would receive reduced administrative and criminal penalties and be connected with professional rehabilitation support.

The government also plans to introduce incentives for soldiers who participate in financial education or demonstrate sound financial habits. Those who place in financial education quiz competitions or show active engagement will receive certificates, commendations and cash rewards. Authorities are also reviewing with relevant agencies whether a soldier's record of maintaining the military savings account through to maturity could be reflected positively in personal credit assessments.

Financial industry professionals — including bank employees, analysts and private bankers — will also take part in the education program. However, guidelines will prohibit them from using the sessions to promote their own products.

The government plans to expand short-form and entertainment-style content as well. Drawing on the model of a program aired on KFN TV last year — in which experts diagnosed real financial concerns raised by soldiers — authorities aim to produce more content that troops seek out on their own rather than attend as a mandatory obligation.

The military currently provides at least two hours of financial education per year for service members. Last year, however, only about 1 percent of those who received financial education took part in interactive programs such as an economics quiz competition. Through the new measures, the government intends to strengthen stage-by-stage education throughout a soldier's service: focusing on preventing financial harm immediately after enlistment, building assets and investing during the middle of service, and managing lump-sum funds and financial planning just before discharge.