"My Neighbor's Child Stopped Going to Academy"?Turns Out, "It Was Due to Family Circumstances"

Private Education Spending Drops for First Time in Five Years
First Decline Since the COVID-19 Pandemic
Little Change for Households Earning Over 7 Million Won per Month
Over 20% Decrease for Households Earning 3 to 4 Million Won per Month

For the first time since the COVID-19 pandemic, private education spending by households with children has decreased. It is analyzed that as consumer sentiment has weakened, academy fees have become a target for budget tightening. The decline was more pronounced among households at or below the median income level, while high-income families saw only a slight reduction.

According to the National Data Office (formerly Statistics Korea) National Statistics Portal (KOSIS) on December 21, the average monthly spending on private academy education for students in married households with unmarried children in the third quarter of this year was 413,000 won, a 0.7% decrease from a year earlier. This is the first year-on-year decline in private academy education spending by households with children in about five years, since the fourth quarter of 2020.

Private education spending decreased throughout all four quarters of 2020, and then increased for 18 consecutive quarters. Spending on private academy education for students refers to supplementary and advanced learning expenses for elementary, middle, and high school students, as well as for young children and repeat test-takers. It is a representative indicator of the private education burden on households.

After the COVID-19 outbreak, essential expenditures such as food, non-alcoholic beverages, rent, and heating costs have fluctuated slightly, but private education spending has remained relatively stable regardless of income or consumption conditions.

A scene of a private academy district in Seoul. The Asia Business Daily DB

Recently, as consumer spending has weakened, spending on academy fees has also declined. The extent of the decrease in private education spending varied by income bracket.

In the third quarter of this year, the decline rate in student academy education spending for high-income households with a monthly income of 7 million won or more was only 2.9%, while households with a monthly income of 3 to 4 million won saw a decrease of 21.3%.

Lee Eunhee, Professor of Consumer Studies at Inha University, told Yonhap News, "Private education spending is typically considered an 'investment for the future,' so it is not an expense that is easily reduced. However, the economic burden felt by households due to high inflation and other factors is now affecting private education spending as well."

She added, "High-income households have more capacity to absorb education costs, so the decline is limited for them, whereas the impact is inevitably greater for middle- and low-income families. This demonstrates the disparity in private education spending according to income level."