[Inside Chodong] Why the Bank of Korea Is Concerned About the '7-Year-Old Exam'

Academic Competition Drives Korea's Population Crisis
Threat to Economic Growth as Fertility Rate Falls to 0.75
Bank of Korea Proposes Regional Proportional Selection
Urgent Need for University Admissions Reform and Immediate Action

"Mom is busy every morning in a rush. So sometimes she mistakenly takes my kindergarten name tag as her employee ID." Seven-year-old Seoyoon, who participated in an English speaking contest, finished her presentation confidently, but her mother Jeong-eun could not smile. To enter the dream English academy 'Class A,' Seoyoon needed to win the grand prize, but her speaking topic was far from the winning theme. Tommy (Minho), who never misses first place, spoke on 'King George VI's speech.' Tommy even bit his nails from the pressure and took private lessons to prepare for the contest.

A scene from Genie TV original drama 'Riding Life'. ENA channel Instagram.

This is a scene from the drama 'Riding Life.' Is the academic competition among seven-year-olds depicted in the drama an exaggeration? The reality is harsher. Recently, KBS's 'Chujeok 60 Minutes' highlighted children taking level tests at age seven to enter famous elementary math and English academies through the episode '7-year-old exam, who is this test for?' This is not a new phenomenon in private education, nor is it only a problem centered around the Gangnam area’s academy district in Daechi-dong. In fact, last year’s private education expenditure, compiled by the Ministry of Education and Statistics Korea, reached 29.2 trillion won, marking the highest amount for four consecutive years. The proportion of students participating in private education also hit a record high of 80%.

The overheated competition for college entrance exams and the resulting rise in education costs are fueling Korea’s population crisis. Last year, Korea’s total fertility rate (0.75) was only half the OECD average of 1.4. The population crisis threatens Korea’s economic growth. Korea’s potential growth rate, currently around 2%, is expected to fall to the zero percent range in the late 2040s, and if the total fertility rate remains at 0.75, negative growth after the 2050s will be difficult to avoid. The Bank of Korea, which adjusts interest rates and money supply to enable economic growth amid price stability, is concerned about the overheated education competition symbolized by the 7-year-old exam.

The reasons why seven-year-olds Seoyoon and Tommy are already obsessed with grades are varied, but fundamentally it is because universities select students based on academic rankings. Students only start taking exams at school in the second year of middle school, and even if they are shocked and realize the situation then, parents say it is already too late to catch up in the grade-based entrance competition. Since last year, the Bank of Korea has proposed the 'regional proportional selection system' as a solution to the underlying education overheating problem amid the economic crisis. This system grants universities autonomy in selecting freshmen but requires that the final selection results be proportional to the regional school-age population ratios. Bank of Korea Governor Lee Chang-yong emphasized at the Global Sustainable Development Forum (GEEF 2025) held on the 14th that "if universities have the will, this can be realistically implemented."

It is well known that educational structural reform is especially difficult in Korea. The interests of the involved parties are more sharply divided than in any other field, making it hard to tackle rashly. However, if immediate action is not taken, hiding behind the word 'realistically,' we must worry about 'side effects at a level our society cannot tolerate,' such as permanent negative growth and social conflict explosions. Governor Lee said, "Unlike in the past, it is encouraging that there is now considerable public opinion that personally feels the pain and empathizes with the problem." Both the parents supporting their children and the government worried about fertility rates and economic growth are distressed. Above all, right now, the psychological distress of Seoyoon and Tommy, who face the 7-year-old exam situation and nervously bite their nails, is right before our eyes. This is why action must begin immediately.