Let's Root Out Illegal Practices of Cram Schools

South Korea is notorious for its higher spending on private tutoring fueled by excessive competition among schoolchildren for college entrance. Parents are groaning under the heavy weight of the ever-increasing costs to send their children to cram schools. Meanwhile, cram schools, better known as hagwon in Korean, continue to try to maximize their profits by exploiting people's aspiration for higher education. Regrettably, they don't hesitate to engage in price fixing and other illegal practices to increase their fees.

On Tuesday, Rep. Kim Se-yeon of the governing Grand National Party (GNP) released a report from the Ministry of Education, Science and Technology that 2,505 cram schools around the country have been subject to penalties for illegally raising their tuition over the past three years. To increase their fees, cram schools are required to get approval from a review panel affiliated with each district education office. But, the schools were found to have collected more from students than what they reported to the education office.

Such illegal practices are nothing new in the country. Cram schools have long been criticized for their exorbitant costs. They have, in the name of costs for study materials and special lectures, taken undue fees from students. For these illegalities, 41 cram schools' licenses were revoked, 161 had their operation suspended and 1,978 were issued warnings or ordered to take correctional steps. Sixty percent, or 1,516, of the schools receiving administrative punishment were located in Seoul.

With the problem coming to a head, President Lee Myung-bak instructed his Cabinet to take stern measures against cram schools for their tuition rigging. The move is welcomed as it is part of the government efforts to help parents ease their painful burden on private tutoring for their children amid higher inflation. Of course, the planned crackdown is quite belated. Besides, critics are skeptical about the real intent of Lee's instruction. They point out that the government has been always long on words but shot on action.

In order to dispel this kind of skepticism, the Lee administration should take resolute action to root out cram school's illegal activities to pinch money out of parents' pockets. On Wednesday, the Fair Trade Commission (FTC) said it had wound up its investigation into major cram schools for college entrance exams and private language institutes to confirm allegations about price fixing for higher tuition. The antitrust watchdog plans to take punitive action against violators next month. We hope the FTC action will produce successful results.

It is also necessary for the authorities to crack down on cram schools for evading taxes. There are widespread allegations that cram schools have been involved in rampant tax evasion. Many of them still refuse to accept credit cards for tuition payment in an apparent bid to deflate their revenue and pay less in taxes. It is imperative for the education authorities to make joint efforts with the FTC, the tax office and parents to combat price fixing, tax evasion and other unfair and illegal practices by cram schools.