'Half-price' tuition may come to end with decreased revenue, enrollment

University of Seoul may raise its tuition after more than a decade-long hike freeze, with others likely to follow.

University of Seoul's campus [UNIVERSITY OF SEOUL]

University of Seoul may raise its tuition after more than a decade-long hike freeze, with others likely to follow.

The university has formed a committee to discuss raising its tuition fees. The committee consists of the school's administrators and external advisors and will discuss in monthly meetings whether to continue its "half-price" tuition policy.

Its tuition for undergraduate programs was cut in half in 2012 and has been frozen ever since. The policy was part of then-Seoul Mayor Park Won-soon's campaign pledges, which he could implement because the city controls the school.

According to the Korean Council for University Education, the average annual undergraduate tuition for the school was 2.4 million won ($1,820) in 2022. The tuition is almost one-third of the national average of 6.8 million won.

The university has also been struggling financially due to decreased funding from the city.

Out of the city's total budget this year, 47.7 billion won was allocated to the university. That's 17.3 percent lower than what the university had originally proposed.

"The quality of education fell as tuition became cheaper," a city official familiar with the matter said. "A lot of students dropped out of the university as it became known as a school that's convenient to enroll in while preparing for next year's [College Scholastic Ability Test] to transfer to another university due to its not-so-burdensome tuition."

University of Seoul might just be the start, as other universities are planning to raise tuition.

Based on a survey conducted by the Education Ministry's press corps in January, 53.5 percent of 116 university presidents said they are considering raising tuition.

"Tuition of some universities are even cheaper than those of hagwon [cram school] for high schoolers and pet kindergartens," Hwang In-seong, secretary general of the Korean Association of Private University Presidents, said.

Private universities in non-Seoul areas may be the first to raise tuition, as they have been struggling financially due to fewer students enrolling and decreasing tuition fee revenues.

According to Korea Higher Education Research Institute (KHEI), the cumulative tuition revenue of private universities outside of Seoul was 4.09 trillion won in 2020, down 7.9 percent compared to 2010. The total tuition of private universities in Seoul in 2020 was 4.31 trillion won, up 3 percent compared to 2010.

"Increasing tuition by 1 percent only generates 40 million won of additional tuition revenue," said an official at a Gwangju-based university, which increased tuition by 1 percent this year. "We have to raise tuition every year, even if it's by a small amount, so there's less backlash when we raise it next time."

Change in government policies that aim to tame tuition hikes is also necessary.

The Higher Education Act states that universities can increase undergraduate tuition by 1.5 times the average inflation rate of the previous three years. Despite the act, the Education Ministry has been encouraging universities to refrain from raising tuition by providing funding for National Scholarship Type 2 to universities that freeze their tuition.

Despite the incentive, some universities resort to seeking extra tuition revenue instead of government funding.

"We don't get government funding of 2 billion won by increasing tuition, but we get extra revenue of 5 billion won," Lee Hae-woo, president of Dong-A University, said.

Although the Higher Education Act puts a cap on undergraduate tuition increases, tuition for graduate and international students has been rising a lot as the act doesn't regulate them.

A total of 35.7 percent of 193 four-year universities surveyed by KHEI raised tuition for their graduate programs and international students this year. Only 8.8 percent raised tuition for domestic undergraduate students.

"Rather than indirectly encouraging universities to lower tuitions, we need to directly provide huge funding to universities to create substantial changes," Lim Hee-sung, a KHEI researcher, said. "But funding does require premises such as enhancing financial transparency of universities and having the government strictly overseen by the government."

BY CHOI MIN-JI, LEE GA-RAM, LEE TAE-HEE [lee.taehee2@joongang.co.kr]