Support Needed for Crisis Management and Structural Improvement of Private Universities
Kim Dae-sik, a member of the National Assembly’s Education Committee (People Power Party, Sasang District, Busan), on the 22nd, officially proposed the “Act on Support for Structural Improvement of Private Universities” at the National Assembly Communication Office, which includes support for structural improvement of private universities.
Kim’s office explained the background of the bill, stating that private universities are increasingly facing financial deficits due to a declining school-age population and tuition freezes, and that the school-age population crisis is expected to further exacerbate the management difficulties of private universities in the future.
In fact, the number of universities with financial deficits increased from 27 in 2012 to 77 in 2022, based on the school fund accounting statement.
According to Statistics Korea, the school-age population (ages 6 to 17) is projected to decrease from 5.34 million in 2023 to 3.07 million in 2043. Within the last five years, three universities have closed due to bankruptcy, and one university voluntarily closed due to financial deterioration, causing tension in the university sector.
Kim pointed out that if regional private universities collapse, considering that universities function as hubs of local communities and the significant ripple effects such as regional economic downturns, it is urgent to legislate to promote the normalization of management for struggling private universities and to establish a policy basis for structural improvements such as mergers and consolidations of universities that have reached their limits.
Kim Dae-sik said, “I have officially proposed the Private University Structural Improvement Act to establish a comprehensive management system for private universities facing crises due to the declining school-age population, including designation and cancellation of management crisis universities, structural improvement measures, dissolution incentives, and dissolution and liquidation to provide exit strategies for universities at their limits.”
The Act on Support for Structural Improvement of Private Universities proposed by Kim includes provisions on ▲ the Private University Structural Improvement Deliberation Committee ▲ designation of a dedicated structural improvement agency ▲ implementation of financial diagnosis ▲ designation and cancellation of management crisis universities ▲ structural improvement measures ▲ special cases related to structural improvement of private universities ▲ special cases regarding dissolution and residual property attribution of closed universities ▲ protection of students and faculty members.
Additionally, to enable private universities to quickly adapt to rapidly changing educational environments, the bill allows the repurposing of reserve funds for structural improvement purposes, recognizes regulatory exceptions for property disposal, and establishes a foundation for regional development through cooperation with local governments.
Even in cases where private universities close, the bill mandates protection measures to strengthen the protection of members by requiring severance pay for faculty and staff and allowing students to transfer to other universities of their choice to safeguard their right to learn.
Kim Dae-sik emphasized, “The Private University Structural Improvement Act is essential to systematically and stably manage and support the structural improvement, dissolution, and liquidation of school corporations and private universities facing crises due to the declining school-age population. I will actively promote legislative activities, including the proposal of the bill, to ensure its enactment during the 22nd National Assembly.”
Kim added, “We will create education policies that consider the long-term future, provide dreams and hope to youth and young adults, enhance the value of our education, and build a healthy educational environment for a sustainable future.”
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