Posted : 2013-01-30 19:32
Updated : 2013-01-30 19:32

Yonsei, KU defy Park's tuition pledge

Student representatives from private universities, including Yonsei and Korea, hold a joint rally to demand further tuition cuts by the incoming Park Geun-hye administration in front of the Korea Banking Institute building in Samcheong-dong, Seoul, where most of the presidential transition committee's offices are located, on Jan. 17. / Yonhap

By Na Jeong-ju

The country's top private universities, Yonsei and Korea, are moving to raise tuition fees in defiance of President-elect Park Geun-hye's pledge to halve schooling expenses for college students based on expanded state scholarship programs.

Yonsei University recently informed student representatives of its plan to raise annual tuition by 2.4 percent this year, while Korea University is seeking a 4-percent increase. Both universities must negotiate with student representatives to fix the tuition levels.

The results of their talks could affect other private colleges, which have been sitting on the fence over the issue apparently due to growing pressure from the public and politicians. Owners and managers of private schools have complained that less tuition income will undermine their growth potential and worsen services for students.

The two universities hiked fees higher than consumer price increases for many years until the government put the brake on their tuition-hike drive last year following a wave of protests from students and civic groups. Other universities also followed in their footsteps to raise tuition fees.

As a result, the average annual tuition at the country's four-year private universities reached 7.38 million won ($6,770) in 2011, the second highest among OECD member states after the United States.

Student councils at Yonsei and Korea are up in arms.

"Yonsei is already charging higher fees than any other schools in the country. The school's move to resume tuition-hike drive shows it doesn't mind public concerns and our demands at all," said Ko Eun-chun, head of the student council at Yonsei. The council has demanded a 5-percent cut for this year's tuition.

The council decided to boycott the tuition negotiations with the school authorities after the latter proposed a 2.4-percent rise.

The tuition talks at Korea University also remain stalled.

The school's student council issued a statement last week to denounce school managers for inflating expenditures as an excuse for a tuition hike.

"It's disappointing that the school is attempting to raise charges on students despite public concerns about high college tuition," the council said. "We ask school authorities again to fulfill its social responsibility and duties. It's deplorable that managers are running the school like a private company."

Challenges for Park Geun-hye

The two universities pose challenges to Park Geun-hye because she is seeking to reshape the government's tuition policy based on the needs of students and parents. Her inauguration is on Feb. 25.

During her presidential campaign, she vowed to reduce the tuition burden on households by increasing scholarships for low-income families and lowering interest rates on student loans to near-zero percent, while keeping universities from raising tuition fees. She also promised free college tuition for the third child in each family.

An aide to Park from the transition committee said the moves by Yonsei and Korea are "unwelcoming."

"It is not a good idea to raise tuition at a time when the society is demanding efforts to address the problem," the aide said, asking not to be named. "Their moves are certainly unwelcoming. We should make efforts to address the tuition issue through discussions with students."

The state scholarship program is tied to tuition policies adopted by universities. The ministry plans to pay scholarships amounting to 2.77 trillion won to students through universities this year, up over 60 percent from 1.7 trillion won in 2012. Schools that raise tuition are unable to apply for most of the scholarships.

Still, many students should receive loans to pay tuition fees.

According to a recent survey conducted by Saramin, an online recruitment agency, 41.5 percent of college students plan to apply for loans this year to pay for tuition.

"Most universities have collected more tuition than necessary in a move to boost their cash reserves and such a practice has continuously increased college education expenses for households," said Rim Jae-hong, a law professor from the Korea National Open University.

Some private schools, including Korea University, have suffered losses from their investments into high-risk financial derivatives.

According to a financial report of the school's assets, the evaluated loss of its investments in equity-linked financial products in 2011 was some 20 billion won ($17 million).

Private schools have emerged as key stock investors, but little is known about how they manage their funds. After cases of investment failure were first revealed a few years ago, some lawmakers proposed measures to enhance transparency in the use of university cash reserves and the creation of an independent committee to monitor their investments. However, such moves have made little progress due to die-hard resistance from the schools' administrations.

Experts say the issue should be dealt with more seriously not just because a reckless stock investment will damage the financial health of universities, but because it could raise the financial burden on students in the form of a tuition hike.

In 2011, the Board of Audit and Inspection revealed that universities have inflated expenditure estimates when drawing up yearly budgets in order to collect more tuition. A college has been collecting 18.7 billion won ($17.1 million) more in tuition on average each year, according to the auditor.

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