Badly managed universities face fund, loan cuts

The Education Ministry listed 43 poorly managed private colleges and universities Monday after a two-month inquiry by an expert panel as part of a drive to weed out uncompetitive schools and address the rising tuition issue. 

The 43 universities will be subject to restrictions in government assistance and of them, 17 schools will face restrictions in student loans on the basis of an inquiry that used criteria such as the employment rate of graduates, the yearly enrollment rate and the number of full-time instructors.

Korea boasts a high college entrance rate ― about 79 percent of high school graduates entered college last year. However, the trend has resulted in a great increase in the number of colleges, as well as more of those colleges failing to meet financial and academic standards.

Amid calls for tuition, the ministry decided to restructure colleges in line with tuition fee cuts and formed the expert panel on college restructuring in July.

“The purpose of selecting poorly managed universities is to use our people’s taxes for good universities. It’s also a serious warning for them to change,” Hong Seung-yong, head of the panel said in the briefing.

Starting next year, freshmen entering the 43 universities will not be able to receive any government-funded scholarships or research support as the schools will be banned from applying for them. Students who enrolled before the inquiry result can receive the funds as they did not know of their school’s poor management when they entered. The names of the schools, however, were not revealed. 

A total of 1.30 billion won ($122 million) has been provided to the 43 universities by government in 2010.

The panel also picked 17 universities that will receive some limit in the extent which students can receive in student loans, including Wonkwang University, Luther University and Mokwon University. The measure will start to apply for freshmen for the year 2012, but those from lower income families will still be able to receive full student loans despite the government measure.

The panel differed in the extent of tuition fees covered by student loans ― only 70 percent of tuition fees will be covered by student loans for freshmen in 13 schools and 30 percent will be covered in the remaining four schools.

There are also seven universities selected for two consecutive years for their poor management who are likely to be included among schools to be closed or merged in the end.

“These schools will be subject to an intensive restructuring process at the end of the year,” said Hong.

The panel is scheduled to select schools with bad management and performance before November and decide which schools will be closed at the end of their college restructuring process.

By Lee Woo-young  (wylee@heraldcorp.com)