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Can We Get Half Tuition Fees from *Groupon?
Yang Chan-sik Reporter Yoon Hye-lin Junior Report  |  webmaster@uos.ac.kr
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[0호] 승인 2011.08.31  
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On July 2nd, Hwang Seung-won, a student at the University of Seoul (UOS), was found dead with three colleagues in a mart where the freezer was being repaired. He was working part-time to raise money for next semester’s tuition fees. He could not avoid working because of how expensive tuition fees are. Even though tuition fees at UOS are relatively inexpensive, many students at UOS have a lot of difficulty paying tuition. This means a lot of private university students are in even worse trouble. There are many students who have to work a part-time job all day long outside of school hours in order to barely save money for tuition fees. These situations lead to the problem that people who are eager to study cannot study. It also forces many university students to die. In the last decade, students who cannot repay their loans or cannot save for their tuition fees have averaged 230 suicides a year. According to one study conducted on university students, 60 percent of respondents said they have felt suicidal because of rising tuition fees.

By the way, why are the tuition fees of universities so expensive? The tuition fee liberalization of private universities was done in 1989. After 7 years, the administration significantly relaxed the establishment standards of universities. As a result, over the past decade more than 80 new universities were founded. And in 2002, the tuition fee liberalization of public universities was also conducted. For the past 10 years university tuition fees have increased by 5 to 10 percent annually and now the average private university tuition fee per year is nearly ₩7,686,000 (U.S. $ 7,170). One of the reasons that the tuition fees have increased each year is the competitive atmosphere among universities. This means that if a prestigious university raises its tuition fees, other universities also raise theirs as well.

Despite the soaring price of tuition fees each year, a strange phenomenon is that enrollment at Korean universities has climbed gradually. More than 80 percent of high school students currently enter university. What is the reason? Cho Sang-sik, a Dong-guk University professor, said “Now you attend university, causing not a need to be taught but an anxiety about the future.” In other words, entering a university is just a step required to get a job rather than true studying. This is because, in reality, high school graduates do not have any chance for promotions. Therefore, there is an argument to ensure all people can have an education by halving tuition fees, since high entrance rates to universities is an unavoidable social phenomenon. Is realizing the half tuition fee policy the best way to solve these problems?

Half Tuition Fee Controversy


In fact, during the last ten-years (2001 to 2011) University of Seoul (UOS) tuition fees have nearly doubled. Specifically, from 2001 to 2008 UOS tuition fees have increased more than the rate of inflation. Especially in 2008, when tuition fees increased about five times more than the rate of inflation. After that, from 2009 until now, UOS tuition fees have frozen. As a result, externally, UOS tuition fees are well-known for being inexpensive compared to other universities. So we should verify if this is true. According to the Higher Education Transparency Service (HETS) 2010 Report, there are 192 universities in Korea. And their average annual tuition fee was ₩6,826,500 (U.S. $ 6,315), whereas the UOS annual tuition fee was ₩4,859,900 (U.S. $4,495). According to this report, the UOS annual tuition fee was about 30% cheaper than other universities and it was 47% cheaper than Yonsei University, which has the highest annual tuition fee. It was also ranked as the 27th most inexpensive University in the country, and it was the cheapest among public universities.

Therefore, through objective data we can see that UOS tuition fees are very cheap. However, as of the Spring semester of 2010, 6.3% of UOS students also received student loans (SL) or Income Contingent (Deun-Deun) Student Loans (ICL). And some students borrow money and fall behind on their loan payments. Of course, most delinquent students forget their payment dates. So after one month, they pay back the borrowed money. However, 35% of delinquent students are more than one month overdue and sometimes they have difficulty paying back the borrowed money. Also, if students are six months or more overdue it harms their credit and if they are nine months overdue they become a credit delinquent. If these things occur before they graduate it is unfortunate and it leaves a blemish on their social life. So at the 231st Seoul Metropolitan Council Finance and Economy Committee conference, a lot of committee members asked questions about the UOS Half tuition fee countermeasure.

Moreover, other universities make several policies to reflect half tuition fees. For example, Kangwon Provincial University (KPU) has promoted that they will decrease 30% of the 2012 tuition fee, 60% of the 2013 tuition fee and finally they will make KPU a ‘no tuition university’in 2014. Also, Seoul National University (SNU) has reformed its scholarships system to carry out totally free tuition or half tuition to those students in the bottom 50% of income (about 1700 to 2000 students) who also maintain a minimum grade point average of 2.4. And Hongik University also awarded ‘The Hanmaeum Scholarship’ to lower-income students regardless of their grades. Furthermore, many universities set up the policy to expand the scholarship and benefit ratio gradually and steadily. However, these days there are many controversies about half tuition fees and the conflict has sharply bulged. So let’s check out these issues.

We agree with half tuition fees for these reasons.


Those in favor of half tuition fees have three main claims. First, they insist current university tuition fees are unusually high and inefficient. According to the Korean Educational Development Institute (KEDI) Report, about 8 out of 10 high school graduates enter university. However, the average annual tuition fee of Korean private universities was ₩7,686,000 (U.S.$ 7,170), which was the second most expensive in the Organization for Economic Cooperation and Development (OECD). But no university ranks in the top 100 universities in several world university evaluations. Also the ratio of public universities in the U.S. is 72%, France is 86%, Italy is 93%, and Germany is 95%, whereas Korea is only 18%. Although college education is not compulsory, most OECD countries cover 70% of the higher education expenses because they think higher education is a basic human right. In comparison, the Korean government only covers 20% of higher education expenses. Therefore, the tuition fees of Korean universities are unusually high and inefficient.

Next, half tuition advocates insist on conducting half tuition fees because poverty must not be passed down on to the next generation because of education expenses. Some half tuition fee opponents argue that high university tuition fees can prevent academic inflation. So they oppose half tuition fees. Also, if universities has autonomy over their tuition fees it creates competition between universities and it produces higher education quality. However, these opinions ignore current domestic situation. Today, Korean high school students enter university because it fulfills the minimum standard to get a job and they want to get a better career. According to a National Statistical Office report, families with a background of junior college or higher education earn ₩5,010,000 (U.S.$ 4,673), but families with only a high school background earn ₩3,470,000 (U.S.$ 3,237). So we can see the income gap between academic degrees. We often express that university students are the cornerstone of Korea’s future. However, these students should not be discriminated against because of educational costs. Therefore, we should enforce half tuition fees because poverty must not be passed down on to the next generation because of education expenses.

Finally, half tuition advocates insist on conducting half tuition fees because we should prevent university students from going into debt. Most university students work part-time jobs or they borrow money from an SL or ICL to pay tuition fees. However, SL and ICL have many limitations (for example, a mandatory grade of B or higher, credit requirements and income standards),so there are not many students that can get a loan. As a result, some students work part-time for medical experiments or some female students work at bars or clubs. Nevertheless, about 70,000 students cannot repay the money after they take an SL and 50,000 students borrow money at high interest rates, with loans amounting to nearly 80 billion KRW (U.S. $ 74,626,865). Because of this, some people think that student loans should also be dramatically reformed. In the U.K., a university student can borrow not only for tuition fees but also living expenses and they do not have to repay a loan until they earn a salary of more than 1,800 GBP. And if they earn a salary of less than 1,800 GBP, they have no interest burden. However, in Korea if a male student attends a private university with a tuition of ₩4,000,000 (U.S. $ 3,731) per semester, he must repay ₩32,000,000 (U.S. $ 29,850) in principle and ₩ 17,000,000 (U.S.$ 15,858) in interest. Thus, before they even get a job they already suffer from excessive debt. These are the arguments for why we should enforce half tuition fees.

We are opposed to half tuition fees because of these reasons.

Opponents of half tuition fees make four main claims. First of all, it will create many tax problems. According to Future Korea, a biweekly magazine, when we consider gross tuition fees of 15 trillion KRW, we would still need 6 trillion KRW to actualize the half tuition fee policy, after eliminating 3 trillion KRW for scholarships. Even if the government pays tuition fees according to income support, a budget worth 4~5 trillion KRW is estimated. In order to cover this, the government must reap more taxes from the people. However, some argue that collecting taxes from people who do not go to university to pay for the education of others is inappropriate. In addition to this are cases where the household has already had children graduate from university or a household with no children. Opponents of half tuition fees argue it is unfair to increase taxes on these households.

Secondly, the budgets of other welfare policies will be reduced because of the half tuition fee policy. Thus, the policy will actually hurt some people, because there will be less funding for underprivileged children, low-income people and the disabled. Jeong Tae-in, a Director of ‘To open a new social researchers’, said using money to support children who cannot go to university would be more desirable for social justice than halving tuition fees. The half tuition fee policy has a problem, in that a wealthy student or those that do not study hard will also receive government support. As a result, due to such wastes in the policy the greatest victims are powerless minorities. We should never forget this.

The third issue is that the half tuition fee policy would turn out to be good for universities, not students. The total number of domestic universities was 347 in 2010, with 202 4-year-course universities and 1452-year-course colleges. There are 3.32 million university students in Korea and that means one out of every four Koreans is an undergraduate. With such a percentage of students in the total population, the percentages of universities and enrollment are estimated to be the highest in the world. However, according to the HETS, 70 universities among the 189 (37%) have not reached their enrollment limit in the last year. So some people worry that the half tuition fee policy is just supporting the financial problems of these poor universities. Above all, even though many universities have saved a lot of money, they have also increased tuition fees.

Therefore, it is a problem to reduce their tuition burden through taxes without their voluntary efforts or attempts at restructuring. In short, solving the moral hazards of universities is urgent business. In order to solve this problem, the restructuring of poor universities is being accepted now as the most persuasive solution. Park Sun-yeong, a policy committee chairman of the Jayu-seonjin party, said that restructuring of 77 universities which are short of students and merging with analogous local universities can reduce total tuition fees by 3%.

The forth reason is that a university education is not yet compulsory. After all, a high school education is not even an obligation. Only elementary and middle school are compulsory forms of education in Korea. In this situation, people point out that first halving the tuition fees of universities will harm the nation’s educational support system. These people claim that if after making high school education compulsory and the supporting condition improves, then the tuition fees of universities would be paid more naturally. In addition, a much bigger problem is that the primary and secondary education budgets might be used for supporting university tuition fees.

Cases of foreign universities

So, what about the cases of foreign universities? At first, we compared the percentage of public universities. In Korea, the number of public universities is 50, which occupies 14%, and the number of private universities is 295, which occupies 86%. The gap between the number of public and private universities is still increasing. On the contrary, in the major OECD countries, the percentage of students in public universities is higher compared to that in Korea. Some of these percentages are 72% in the U.S., 86% in France, 95% in Germany and 93% in Italy. Even the U.S., the only country which has more expensive tuition fees than Korea, has 72% public universities, and these universities have inexpensive tuition fees. The rest of their private universities have systems that offer scholarships to most of the students. On the other hand, an official of the Ministry of Education, Science and Technology (MEST) in Korea said that until the 1980s, the government had no choice but to rely on private universities in order to meet the demand of higher education. This is because the government’s budget was lacking. Increasing the number of public universities by 50% would rid the worries about tuition fees as well as the entrance examination. Kim Young-jin, a National Education, Science and Technology Committee member, said that even if Korea is ranked in the top 10 in the world economy, the budget invested in education is only 0.6% of Gross Domestic Product (GDP). He added that by increasing the budget to at least 1.5% of GDP, the administration could support the public universities. Experts emphasize that it would be helpful to restructure poor universities and ease tuition fees to increase the number of students at public universities.

Next, we compared tuition fees with loans. France, which aims for education equity spread socially, has tuition fees that are supported by the national and local governments. As a result, French university students pay tuition fees of around 2.6 million KRW to 5 million KRW per year. Also, French university students are supported by the government and society with such things as rent assistance and discounted transportation, museum, and gallery fees. So students can study without a large financial burden. However, while most European countries support tuition fees, the U.K. is famous for charging expensive tuition fees. Recently, despite the opposition of students, the U.K. processed a bill which is raising the upper limit of tuition fees from £ 3,290 per year (5.9 million KRW) to £ 9,000 per year (16.2 million KRW). However, they also prepared measures that protect low-income students by mitigating the conditions of repayment.

The repayment system was adjusted, as students who graduated from university used to repay their tuition fees after their salary becomes 15,000 pounds (27 million KRW), but now they must repay their tuition fees after their salary becomes 21,000 pounds (37.8 million KRW). The UK government will also forgive debt if a student who graduated 30 years ago cannot repay the loan because of economic circumstances. Korea also has a student loan system. However, according to the Korea Student Aid Foundation (KOSAF), the number of students who became credit delinquents exceeded 25,366 last December, because they could not repay their loans. In order to solve this problem, the government started ICL, but students are not interested in the ICL. This is because the interest rate is too high. The ICL is a system where university students do not have to pay interest while they are studying at university. After getting a job, they only repay the principal and interest when their income exceeds the minimum cost of living (4 people per household). However, this system has compounded interest. Thus, though the interest rate lowered from 5.7% last year to 4.9% this year, a debtor must still repay tens of millions of KRW after four years.

Finally, we compared with the number of students per teacher and scholarship. If we can receive high-quality education services while tuition fees are expensive, then there is not a problem. However, the facts show it is not worth it. According to the OECD, the number of students per professor in Korea averages 32. This is more than two times the number of other OECD countries. The statistics show an average of 10.4 students per professor in Japan, 15.0 in the U.S., 16.2 in the U.K., 11.5 in Germany and 14.4 in Mexico. So, because the conditions in Korean universities are this bad, professors and students cannot satisfy each other. The portion of students receiving scholarships is also lower in Korea than in foreign universities. According to the MEST, in 2007 the portion of students receiving scholarships in American universities was 77% in public universities and 87% in private universities, while in Korea it was 45% in public universities and 28% in private universities. Thus, the portion of students receiving scholarships in American universities is significantly higher than that of students in Korean Universities.

Tuition fees in American universities are the most expensive in the world. However, university authorities, state governments and the federal government serve scholarships and subsidies to students with difficult home circumstances. So students do not suffer psychological or physical pain and do not have to give up learning. In Korea, the annual net tuition per 1 person of major metropolitan private universities is 6 million to 7 million KRW. 18 universities are receiving 6 million KRW in tuition, which is the most common. 4 universities are receiving 7 million KRW in tuition and 3 universities are receiving 5 million KRW in tuition, among the 26 total universities. Myongji University is charging more than 8 million KRW. Domestic private universities, 87% of all universities, are getting an average of 6 million KRW for net tuition. In addition, the ratio of scholarships in private universities is very low. Among the 26 metropolitan private universities, a mere 7, such as Yonsei, Korea and SungKyunKwan University, have a ratio over 20%. Most universities account for nearly 10% of the ratio. Nevertheless, the 10 major national universities account for more than 20% of the ratio and SNU exceeds 35% of the ratio.

Opinions of UOS students


In this situation, we wanted to know the opinions of UOS students. So we surveyed the internet community and asked, ‘What do you think is the most appropriate average tuition fee per semester?’ 204 people participated in the voting and the results were as follows. Before conducting the survey, we expected that all of the students would just want the lowest amount. Surprisingly the results were little different than what we expected. Of course, the ratio of the amount of 1 to 1.5 million KRW was the highest, but the rest of the choices received higher percentages than we expected. One of the reasons that voters chose 1 to 1.5 million KRW and 1.5 to 2 million KRW was that they can afford these levels. People who voted for 2 to 2.5 million KRW, which is the current level, said this was less expensive than other universities, so they wanted to keep this level and stop any more increases.

And there were some who thought that unconditionally cheap tuition fees seem bad for the growth of UOS, because then UOS cannot cover its total budget. There were also voters who chose greater amounts than current levels. However, they did not share their opinions directly. So to quote the other comments, they might think that a delay of UOS’s growth could be caused by a decreased budget. People who wanted tuition free of charge were also represented. And finally, there was one unique opinion, that said UOS should support tuition fees according to some condition. For example, a citizen who has lived in Seoul for more than four years or a taxpayer in Seoul should go to UOS free of charge. And for other students who are not Seoul taxpayers, they should pay tuition fees that are 1/3 or 1/2 of the private university level.

Conclusion

There is a Korean saying, ‘It is a case of a black hen laying white eggs.’ It is used when a good person is born from a humble family. But nowadays people usually say, “They cannot find ‘a case of a black hen laying white eggs.’” Nonetheless, parents force their children to study because they think only by studying can a person escape poverty. And sometimes parents apologize for the lack of support they can provide. The half tuition problem is basically an extension of these things. In Korea, a university education is no longer a matter of choice, but rather a requirement. Of course, the half tuition problem is not easy to resolve because it is tied up with multiple interests and various circumstances. However, it is the time to discuss why we cannot find a case of a black hen laying white eggs, and judgments about this are now left for the reader of this article to decide.

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