Ministry sets out on restructuring following dispute over tuition


The government on Monday took the first step in a long-term drive to pressure poorly managed universities to shut down by naming 43 underperforming schools in terms of student enrollment and graduates’ employment.

State financial aid will be limited to the 43 schools that rank below the 15th percentile in the study by the Education Ministry and a nongovernmental panel, and student loans will be restricted to the bottom half of them.

The need for reform comes out of an oversupply of colleges and college graduates here that often adds to the job-finding woes, an issue that has attracted renewed political attention in the wake of escalating concerns over high tuitions.

More than 80 percent of the nation’s high school graduates go to college, but dozens of universities have a hard time making ends meet as they fail to attract more students than their faculty. This is largely attributed to the fact that more than 100 new colleges have sprung up in the past 20 years.

The high rate of college graduates, in contrast to the usual 30 to 50 percent range in many advanced nations, has spawned a social perception that today’s college graduates are not much different from high school graduates 30 years ago.

The government activated the long-awaited project for their “structural reform” after politicians including the ruling party floor leader earlier this year echoed past campaign pledges for “half-priced tuition,” initially presented by former Grand National Party chairwoman Park Geun-hye in 2007 as she made her presidential bid.

College tuition has continued to rise by an average of 30 percent in the past five years, weighing down on some 400,000 students who rely on loans amid increasing household debt.

Against this backdrop, the Board of Audit and Inspection launched an inquiry into the financial soundness of 66 universities suspected of committing accounting irregularities to increase tuition fees.

The Education Ministry and the 20-person nongovernmental panel which consists of professors, representatives of associations of universities and businesses including a law firm and two accounting firms, said the BAI’s audit results will be reflected in their annual rankings of universities.

Because the evaluation will be made every year, the blacklisted schools have a chance to regain government support depending on how they raise employment rates, student enrollment, the percentage of full-time professors and scholarships, according to the ministry.

Education Minister Lee Ju-ho has vowed to find a way out for insolvent private universities and establish “a platform” that allows restructuring at all times.

“There is a need for legislation or revision of bills related to restructuring colleges,” Lee said in a policy report to the National Assembly in June.

Two bills designed to prompt reeling universities to shut down by allowing the founders to redeem part of the school’s property are pending in the National Assembly.

There are a total of 346 colleges in the country, 200 four-year schools and the rest two-year.

Fifteen religious schools refused to take part in the evaluation and therefore will be non-eligible to apply for state financial aid programs. State scholarships for individuals will be available for current students of those 15 schools, but not for those who enter next year or later. Of the 288 evaluated, less than a fifth (53 schools) had a student enrollment of over 10,000. Thirty percent, or 85 schools, had between 5,000 and 10,000 students.

By Kim So-hyun (sophie@heraldcorp.com)