Private universities that close must not ‘profiteer’

With ‘surplus’ universities and schools being encouraged to shut down or merge due to Taiwan’s demographic downturn, the government has said that private institutions should not be allowed to profiteer from selling land designated for educational use.

As a way of enabling universities that cannot recruit enough students to cover the cost of closing down – costs can include payoffs for staff – Taiwan’s Ministry of the Interior recently proposed allowing private institutions to sell their land for business use.

The proposal suggested that private institutions could recoup up to 80% of the commercial property value, and some of the money could go towards paying staff.

This angered teacher unions, which said it would encourage profiteering and could mean that some institutions would “deliberately” close in order to benefit from the land scheme.

Land for educational purposes is normally acquired far below market value. Under current laws, repurposed institutional land can only be for educational or social welfare use.

In a discussion this month in Taiwan’s lower house of parliament, the Legislative Yuan, Education Minister Chiang Wei-ling proposed that 50% of a private institution’s land should be returned to the government.

Chiang said that of the 50% of land not handed to the government 25% should be for public use such as social welfare institutions and nursing homes for the elderly, and only 25% should be sold for commercial or private use.

Of the commercial land only a small proportion should benefit individuals – such as paying teacher salaries – Chiang proposed, and he recommended that the proceeds of land sales should only go to legal entities such as organisations, rather than to individuals.

The suggestion came after Minister of the Interior Lee Hong-yuan said in the Legislative Yuan on 4 October that at least 30% to 40% of the land of private education institutions could be confiscated by local government if the land was within an urban redevelopment project, and that this was not an upper limit.

Backdrop

The number of births in Taiwan is one-third less than 15 years ago. At the current rate of demographic decline, by 2016 one-third of the country’s 162 universities will be forced to close, according to government estimates.

The Education Ministry last year identified eight private colleges as candidates for closure because of poor management and low enrolment numbers.

Several public institutions in remote areas have already been merged or closed.

Chiang announced last November that six Taiwanese universities would be merged into three because of a dramatic drop in applications. These were mainly teacher training institutions that are to be amalgamated with nearby universities this academic year, despite previous attempts at mergers that failed due to administrative complexities.

Another four government universities in central and southern Taiwan would share resources and collaborate on research, Chiang said.

However, around three quarters of all university students are enrolled in private institutions, which are more difficult to shut down and cannot be forced to close by the government under current laws. Hence the need to provide incentives.

Many private institutions have lowered their admissions criteria in order to fill seats – some of them granting places to students with 100 points or less in the national post-secondary entrance exam. The top score is 500 points.