A Long Road Ahead for Higher Education Funding... Even Tighter Tuition Regulations [University Transformation] ⑪

Per Capita Public Funding for Universities Falls Short of OECD Average
Investment in Higher Education Lower Than Primary and Secondary Levels, Unlike Other Major Countries
Tuition Regulations Further Worsen University Financial Difficulties

If one of the main things universities expect from the government is "autonomy," the other is "investment." With the financial resources for higher education (universities) in South Korea remaining lower than those for primary and secondary education, and tuition regulations having persisted for more than a decade, universities are struggling to secure their own funding.

According to an analysis by Asia Economy on September 29 of the Organisation for Economic Co-operation and Development (OECD) education indicators, South Korea's higher education funding has remained at only 60-70% of the OECD average for over 10 years. South Korea's per capita public expenditure on university education was 66.2% of the OECD average in 2018, 64.3% in 2019, 67.5% in 2020, 66.2% in 2021, and 68.5% in 2022. As of 2021, South Korea's per capita public expenditure on university education was $13,573, which is only 37.4% of the United States ($36,274) and 66.2% of Japan ($20,518).

Even more striking is the structure of educational spending. In most OECD countries, per capita public education expenditure is highest for higher education, followed by secondary and then primary education. In contrast, South Korea allocates the smallest share to higher education. In 2022, per capita spending was $25,267 for secondary education, $19,749 for primary education, and $14,695 for higher education. While the global trend is to concentrate the most investment in universities, South Korea is moving in the opposite direction.

The difference becomes even clearer when comparing the budgets of world-renowned universities. Harvard University in the United States invests 7.8 trillion won per year in university education, and the University of Tokyo in Japan invests 2.9 trillion won, while Seoul National University, which has the largest budget among domestic universities, has a budget of only about 1 trillion won. When universities face financial difficulties, the quality of university education inevitably suffers, affecting educational facilities, equipment, and faculty appointments.

The biggest reason for the lack of university budgets is the "tuition regulation," which has been in place for 16 years since 2009. Under the Higher Education Act, universities can only increase tuition by up to 1.5 times the average consumer price inflation rate of the previous three years. If a university exceeds this limit, it becomes ineligible for the government's "Type 2 National Scholarship" funding. Furthermore, with the amendment to the law passed this July, starting from the first semester of next year, the tuition increase cap will be further lowered to 1.2 times the inflation rate. Universities have appealed for deregulation, saying they are unable to pay faculty salaries or replenish equipment, but instead, the regulations have become even stricter.

The government also uses financial support as leverage to effectively dictate university admissions systems. After controversy over fairness in university admissions in 2019, the Ministry of Education pushed for an increase in regular admissions, making it so that 16 universities in Seoul could not apply for the "High School Education Contribution University Support Program" unless they raised the proportion of regular admissions to 40%. This program provides 500 million to 600 million won per university to those that work to reduce students' admissions burdens. In order to receive financial support, universities must maintain the "40% regular admissions" requirement, which has been criticized as an infringement on university autonomy.

The government also acknowledges the need to expand higher education funding. The "Higher Education Innovation Report" released by the National Education Commission on September 19 includes a goal to increase the scale of higher education funding, currently at 0.6% of gross domestic product (GDP), to at least 1%-the OECD average-by 2029, so that Korean higher education can become a key driver of national competitiveness and future talent development. To achieve this goal, an additional 7 trillion won in funding will be needed by 2029. While the report is not a finalized agenda of the National Education Commission, it will be used as a reference for future national education development plans.

However, some point out that, along with expanded support, deregulation of financial matters such as tuition must also be pursued. Cho Sangshik, professor of education at Dongguk University, said, "In the case of faculty salaries, national universities reflect increases in line with civil servant pay, but at private universities without a regulation tying salaries to civil servant levels, faculty have likely suffered due to the tuition freeze. Improvements are needed to prevent faculty from leaving universities."