"Student Allowance Scholarship..." Private University That Lost Entire Principal in Stock Investments

Only 7 Schools Achieve Over 0% Returns... Duksung Women's University Tops
Minus 100% Returns... Some Lose Entire Principal

It has been revealed that 39 private universities invested in securities using their tuition fee reserve accounts and incurred losses. Among them, some universities lost their entire principal. According to regulations, private universities can establish tuition fee reserve accounts for purposes such as the construction, expansion, or repair of educational facilities, and the provision of student scholarships. They are allowed to acquire securities up to half of the reserve amount, and at the end of each fiscal year, the gains or losses on the fund are assessed based on market value evaluation.

According to the "2019-2023 Fiscal Year Private University Tuition Fee Reserve Account Securities Income Distribution" received by Jin Sun-mi, a member of the National Assembly's Education Committee from the Korea Private School Promotion Foundation, as of the 2023 fiscal year, 39 universities incurred losses from investing tuition fee reserve accounts in securities. This number increased by 13 compared to 26 universities in the 2019 fiscal year.

[Image source=Yonhap News]

Twenty-two universities either earned profits or recorded a 0% return through investments in tuition fee reserve accounts. Among these, only seven universities had a return rate of 0% or higher. Duksung Women's University recorded the highest return rate at 2.4%, while the others ranged between 0% and 1%.

Nineteen universities suffered losses. The lowest was Myongji College, which recorded -59%.

Twenty-six universities were confirmed to have invested more than 10 billion KRW in securities. The universities with the largest investment amounts, Hongik University (303 billion KRW) and Ewha Womans University (281.6 billion KRW), recorded negative returns of -0.1% and -0.9%, respectively. Only Yonsei University, the third largest investor with 134.5 billion KRW, barely achieved a positive return of 0.6%.

Expanding the scope to all universities investing in securities, Gimpo University had the highest investment loss rate at -100%, losing its entire principal.

Assemblywoman Jin stated, “While it was expected that universities could pursue independent revenue generation through reserve fund securities investments, the reality is that they are incurring losses,” and criticized, “The Korea Private School Promotion Foundation must conduct thorough accounting audits.”

She added, “Each university must carefully review its tuition fee reserve account securities investment policies and urgently devise measures to ensure the stable management of reserve funds.”