[Viewpoint] Private Universities Are Sinking

The official reduction or freeze of university tuition fees occurred in 2012 with the implementation of the half-price tuition policy. However, most universities had already frozen tuition fees since 2009. This was to alleviate the financial burden on students facing economic difficulties due to the 2008 global financial crisis. After the Ministry of Education officially declared the half-price tuition policy complete in 2015, universities expected tuition regulations to be lifted, but there has been no sign of this yet.

Some argue that the fact that private universities have endured without collapsing despite 12 years of tuition fee reductions and freezes proves that there was excessive financial padding in private university budgets. However, this is only a superficial observation. Although they appear stable on the outside, internal problems have long deepened. They are merely anxious and worried, unable to speak out for fear of affecting student recruitment.

Following the university structural reform evaluation results, punitive quota reductions continued, and to make matters worse, universities have been unable to fill the reduced admission quotas caused by the declining student population, with dropout rates increasing as well. Over the past five years, the number of enrolled students has decreased by 110,000. With tuition freezes, reductions and abolishment of admission fees, and declining student numbers causing continuous decreases in financial income, recent demands for tuition refunds have compounded the crisis.

Private university financial indicators began to decline after peaking in 2014, and the rate of decline is expected to accelerate exponentially. Since universities are nonprofit organizations, it is difficult for outsiders to notice their collapse until it is complete. Even university members themselves tend to be unaware of the severity.

Based on last year's settlement, private university tuition income decreased by 460 billion KRW compared to 2011, and total revenue dropped by 668.7 billion KRW, with the decline widening. When converted to 2010 constant prices, last year's revenue decrease amounts to 1.9669 trillion KRW, and the cumulative revenue loss since 2012 reaches 10.3169 trillion KRW (an average of 1.2896 trillion KRW per year). Even the reserves, which have been heavily criticized, are rapidly shrinking.

According to OECD statistics, in 2010, per-student education expenditures for elementary, secondary, and university levels were $6,601, $8,060, and $9,972 respectively. However, by 2013, secondary education expenditure surpassed university, and in 2014, elementary education expenditure surpassed university, with the gap widening further by 2017 to $11,702, $13,575, and $10,633 respectively. Over seven years, elementary and secondary education expenditures increased by more than $5,000 each, while university education expenditure increased by only $661. This is an embarrassing level for what is called higher education. University per-student education expenditure, which had caught up to 73.7% of the OECD average in 2010, fell further behind to 65.1% in 2017. This is the result of tuition freezes without any countermeasures.

Since the tuition freeze, the national higher education budget has increased by an average of 8.59% annually, but excluding national scholarships and increases in national university staff salaries, the increase is only 1.95%, which is below the inflation rate. Private universities are barely surviving by freezing or cutting staff salaries, hiring non-tenure-track professors, reducing book purchase budgets, lowering graduation credit requirements and the number of courses offered, cutting research and student support funds, and withdrawing from reserves. Although national universities also face financial difficulties, their professors’ salaries, as public officials, continue to rise, making their situation better than private universities. National university professor salaries increased by 35.1% compared to 2010, whereas private university salaries have been frozen or cut since 2012.

One can imagine what would have happened if the tuition freeze had led to salary freezes for administrative public officials and members of the National Assembly. More universities will collapse in the future. When universities collapse, local economies collapse as well. To revive local economies, financial deficit subsidies for private universities may soon begin. It is also difficult to demand that professors endure continued salary freezes based solely on their social status. With the amendment of the Teachers' Union Act in June this year, university professors can now establish unions. The situation has already reached a point where tuition increases cannot solve financial problems. It is time to devise drastic measures to save private universities.

Song Ki-chang, Professor, Department of Education, Sookmyung Women’s University