Ruling shows need for colleges’ accounting clarity

Aside from extortionate tuition, one of the ugliest aspects of higher education in Korea is murky accounting practices by colleges. A local court’s decision Friday provided momentum to correct it.

National and public universities have collected ``school support fees” as part of tuition since 1963. The Seoul Central District Court ruled these charges have no legal grounds, and told eight schools to pay 100,000 won to each of the 4,219 plaintiffs.

The verdict is obviously justified. The fees were based on false assumptions that all students became members of the schools’ support associations upon enrollment. In reality, most students don’t even realize the existence of such groups, meaning the schools are using them as just a means to increase tuition.

The system had some basis for existence half a century ago, when the college entrance rate was low and the nation was poor. With the college enrollment rate reaching at 82 percent now, higher education is no longer a prestige but an obligation here. Korea has also grown to the world’s 14th largest economy and many schools are awash with cash reserves.

In a topsy-turvy world of public college accounting, these fees have come to represent 86 percent of tuition, as schools resort to this method, free from government regulations, to raise tuition. School authorities use the money ― originally aimed at expanding facilities and supporting research ― to meet labor costs resulting from pay hikes for professors and lecturers, to buy equipments for university presidents’ residences and even settling dining and wining expenses for faculty members.

If the Supreme Court upholds the ruling, the national and public schools will have to pay up to 13 trillion won to a maximum 1.95 million students, present and former. Realistically, this will be difficult, and there could be a problem of inequity with private colleges, which began including school support fees in tuition in 1999.

The education ministry is right to do away with the system and integrating it into unified accounting. Yet it would be meaningless if it allows schools to fill the void by raising tuition. The government should tell the public schools to stop collecting these fees by saving on nonessential costs. If they complain about a possible drop in educational quality, the government should provide financial help from state coffers.

Those tempted to take issue with increasing aid to colleges from taxpayers’ money should consider the reality facing this country. Korea’s college graduation rate in the 25-34 age group tops all OECD members. Its tuition is at the world’s second highest level ― or highest in terms of real burdens ― and the government’s education spending per capita GDP is half the OECD average.

The ruling should serve as an occasion to make the balance sheets of colleges, public or private, more transparent. The government can help this cause by tightening supervision and tying its aids and grants not only to academic performance or student enrollment but also to accounting transparency.