Price and rise of China behind decline in mobility
Korea’s Ministry of Education data, released early in 2015, revealed a three-year slide in the number South Korean students studying abroad. The decline, first noted in 2012, has continued through 2014. Initially, the 2012 dip tended to be regarded as an anomaly, but it now appears to be evolving into a trend.
The Ministry identified 219,543 Koreans studying abroad in 2014. That number was 3.3% below the 2013 figure. While the number of outbound students has declined, some destinations have lost favour and a few closer to home have gained appeal.
The Korean press recently reported that on aggregate students going abroad in 2014 expended the lowest sum on out-of-country tuition in nearly a decade. Of the Korean students still going abroad for college, an increasing number are staying closer to home in Asia. Why? One possibility is that the Korean middle class appears to have become increasingly price sensitive to the once favoured high-tuition countries.
Their sensitivity may be a residual effect of the Great Recession of 2008 coupled with structural problems within the Korean economy. A second possibility is that the number of students going to Chinese universities has picked up.
With recent Korean graduates facing relatively high under- and unemployment rates, the strengthening economic ties between Korea and China coupled with the prospect of a free trade agreement in 2015 could lead to jobs for graduates with Chinese language skills and cultural experience.
Another possible reason is that China’s tuition fees and related living expenses compare favourably with the former favourites and favourably align with the middle classes’ cost consciousness.
This evolution in Korea’s student mobility has also been influenced by demographic changes that have taken nearly two decades for their impact to fully emerge. Korea’s tertiary education community enjoyed growth for much of the period since the 1960s. Domestic demand for university places grew with the population. There was an accompanying increase in the number of outbound students.
Since the 1960s the number of government-accredited universities has grown to the present 201 in response to increasing demand for university places. A major misalignment in the supply of and demand for university places has been on the cards for years. In the years since 2003 there has been a steady decline in the pool of college-age citizens in the general population.
Each new academic year has brought fewer students to fill university places. Without a significant increase in the birth rate, it is unlikely that this supply-demand misalignment will correct itself in the near term. Fewer students enrolled will surely continue to influence the decline in the number of outbound students.
In recent decades economic and social changes are said to have led to a decline in the nation’s birth rate. In the past few years, except for in the elite institutions, the supply of university places has outstripped demand.
As a developed country, it is said that Korea needs a fertility rate of at least 2.1 births to sustain a population of over 50 million citizens. The National Assembly Research Service has reported that the nation’s fertility rate has dropped to 1.19. It has been suggested that the number of excess university places may grow to 160,000 in the next decade.
The Ministry has been addressing this market misalignment in recent years by assigning a student intake quota to each university. While there may be a variety of possible justifications, the quotas appear to provide a mid-term easing to the non-elite institution’s long term enrolment challenge. The quotas do not apply to international students.
In addition, the Ministry has closed a few institutions in recent years and announced its plans to close or merge as many as 40 others in the short term.
The Asahi Shimbun newspaper reported: “Beginning next fiscal year, universities will be categorised into five grades. Government funding for universities in the bottom two grades will be minimised. If they cannot then manage, they will be forced to close.”
A development reflecting Korea’s commitment to globalisation may also further decrease the number of its outbound students. Plans for the Incheon Global Campus, or IGC, include a university city accommodating up to 10 foreign institutions.
There are four institutions presently operating in the IGC – the State University of New York, the University of Utah, George Mason University and Ghent University.
Without the cost of travel and living abroad, they will offer a marginally less costly path to earning a valid foreign degree. For instance, George Mason University Korea physically brings the US university’s main campus’s curriculum, faculty members, oversight and reputation to Korea. US regional and AACSB accreditation are also in the mix. The package may appeal to cost-conscious parents.
Recruiting international students
While the IGC initiative may keep some Korean students at home, it does nothing to increase flagging enrolments at domestic universities and may acerbate the oversupply problem. With the government’s support, some schools are helping themselves. Without quotas, universities are free to recruit and admit qualified international students to fill their surplus places.
A number of universities have proactively addressed the surplus place issue. In an effort to fill them from abroad a number of Korean universities have begun to offer selected portions of their curricula in English in order to attract international students.
The success of these independent initiatives has been characterised by high-quality teaching and a willingness to teach in English. Some institutions have hired English-speaking lecturers from abroad. A few are offering entire curricula in English to attract inbound students to fill a portion of their surplus places.
The changes in Korean student mobility appear to be driven by economic and social changes within the larger society. With fewer and fewer matriculations on the horizon for the next 18 years, coupled with the concerns of cost-conscious parents, the number of outbound Korean students may continue to decline.
William Patrick Leonard is dean of SolBridge International School of Business, Daejeon, Republic of Korea.