SOUTH KOREA: Tuition fees cut after protests

In an unprecedented climb down the ruling Grand National party announced on Thursday it would cut tuition fees by 30% by 2014 in an attempt to stave off growing protests.

The government said it would budget a total of 2 trillion won (US$1.8 billion) next year to lower fees by just over 15%. Further cuts will be made in 2013 and 2014 after pressure from opposition parties announcing they would introduce legislation to halve fees, support low-income students and reform private college foundations which back the majority of the country's higher education institutions.

However, in a clear indication that the party's announcement was a rushed one, the finance ministry said it has still to reach an agreement with the ruling party on the exact amount of government spending. The president is scheduled to hold a rare meeting with opposition leader Sohn Hak-kyu, one of the strongest presidential contenders, to discuss a range of issues including college tuition.

Recent public opinion surveys here showed an overwhelming majority of those polled supporting lower college tuition costs.

Students protesting against high university fees have been directly targeting President Lee Myung Bak and other members of the ruling Grand National party who campaigned for a halving of fees in the 2007 election.

This year, the annual protests against high fees, which are usually confined to campuses. have taken an ominous turn, spilling out into the streets.

Recent protests have included civil society groups and opposition parties with some 510 civic groups forming a coalition to support the students in a clear escalation of the campaign.

With 80% of the country's school leavers heading for college - the highest in the world and double the proportion of most European countries - the protests are seen as politically explosive. At the same time, the rising number of defaults on student loans could have major economic repercussions.

Last week Education Minister Lee Ju-ho, referring to the election pledge, said: "Rather than cutting university tuition fees in half, we are reviewing ways to lessen the burden on students through more scholarships and financial aid."

The protests that have rocked universities in Seoul and a number of other universities have been held almost daily since late May, with students shaving their heads, holding candle-lit vigils and shouting their pet slogan "Halve Tuition Fees!"

Average fees have almost doubled in the past 10 years. At a private university they are around US$8,000 while the average income in South Korea is barely double that figure. South Korea has the third highest university tuition fees among advanced industrialised countries of the OECD, but falls behind in providing state-backed scholarships and student loans, according to Korea's Ministry of Education.

The ministry said in a report released this week that government scholarships accounted for 4.4% of total public education costs, compared with the OECD average of 11.4%, and student loans bore 5.7% of the total expenses, far lower than the OECD average of 8.8%.

Public spending on higher education as a proportion of the total is below the OECD average of 69%, the report said, leaving most of the tuition burden on students and parents.

Meanwhile, another OECD survey, that ranks the country last among member countries in terms of college education environment, suggests they get little in return for the exorbitant charges.

Korean universities average around 33 students per professor - more than double the OECD average of 16 students per professor. Meanwhile, an analysis by the Korea Education and Research Information Service, found the average number of library books per student at top Korean universities is around 70, fewer than the 71 at the lowest ranking of 113 American universities surveyed and an indication that money is not spent on the student experience.

Korean universities invest a relatively small sum in students, compared with the tuition fees students pay. They spend US$8,920 on each student, which is far less than the OECD average of $12,907, half the spending per student of universities in the US (US$27,010) and little more than half of those in Australia ($14,726) and Japan ($14,201).

The Korea Chamber of Commerce and Industry recently found that a majority of graduates thought their college education was little use in their office work. Just one in 10 respondents said college education reflected the needs of businesses.

Meanwhile, with the huge expansion in numbers of graduates, unemployment has soared - officially it is around 10-20% even at the best universities. But individual professors insist it is even higher, possibly as much as 50%.

This means many students are failing to pay back education loans. The Korea Student Aid Foundation, which handles student loans, said the number of students registered as 'credit delinquents' surged from 670 cases in 2006 to 25,366 last year - a 38-fold increase.

Students who are six months behind in repayments are registered as 'credit delinquents' by the Korea Federation of Banks.

The value of overdue student loans has also surged to 304.6 billion won (US$1=W1,080) last year compared to 65.7 billion won in 2006, with default rates around 3.1-3.4% or around three times the average default rate at domestic banks.

Little attention is paid to the capability of students to repay the loan and the money is given without collateral, professors say.

Last year the government said it was 'resolving' the tuition fee crisis by bringing in the Income Contingent Loan, where interest payments are deferred until after graduation and repayments kick in once a graduate's salary surpasses the minimum cost of living for a four-person household. But these higher interest loans have never been popular.

Education Minister Lee has said halving tuition fees would amount to a "blanket subsidy" that would only enrich poor-quality universities and educational foundations that do little to improve the quality of teaching.

Although there is consensus among opposition parties on the need to cut fees, they are divided over how to implement the cuts, a move that would require an enormous budget.

Korea's President Lee has also warned that the budgetary expense of precipitous cuts in tuition would "rock the country" economically.

The number of university students rose from 1.59 million in 1999 to 2.03 million in 2010, with jobs failing to keep up with the numbers.