15 Years of Tuition Controls... Unrecovered Shortfall at Private Universities Reaches 20 Trillion Won

KEDI Analysis: Government Subsidies Covered 30% of Private Universities' 29.9 Trillion Won Cumulative Shortfall
Tuition Hikes Added 982.2 Billion Won to Students' Burden
Direct Government Spending at 43.8% of OECD Average... Cost-Sharing Principles Needed

An analysis has found that the unrecovered shortfall borne by private universities due to tuition controls over the past 15 years exceeds 20 trillion won.

According to a report titled “15 Years of Tuition Controls: It Is Time to Share the Cost of Higher Education with the Government,” released on October 20 by the Korean Educational Development Institute (KEDI), the estimated cumulative shortfall at private universities resulting from tuition controls from 2011 to 2023 was 29.8977 trillion won. Government subsidies covered just 30.7% of the amount, leaving an unrecovered shortfall of 20.7123 trillion won.

Korean Educational Development Institute

Over the same period, annual tuition per student at private universities actually fell, from 7.69 million won in 2011 to 7.57 million won in 2023. Tuition in 2023 was also 3.27 million won (30.2%) lower than it would have been if the statutory cap on tuition increases had been applied. As a result, private universities’ real net revenue fell by 20.9%.

The researchers pointed out that no adequate institutional mechanism had been established to compensate universities for shortfalls caused by tuition controls. They said that although government funding for higher education increased 2.3-fold, from 8.2 trillion won in 2011 to 18.9 trillion won in 2023, student financial aid increased 5.7-fold, while general funding programs rose by only 2.2-fold.

The researchers also found that although the policy of freezing tuition was eased over the past two years, the burden was passed on to students. In the 2025 academic year, 136 of 193 universities raised tuition, and in the 2026 academic year, 130 of 192 universities did so. The resulting cumulative additional burden per student was 701,000 won. Based on approximately 1.4 million enrolled students, the nominal additional burden on students and their households was estimated at about 982.2 billion won.

By contrast, South Korea’s direct government spending on higher education per student stood at $6,617 in 2022, just 43.8% of the OECD average of $15,102.

The researchers proposed abolishing the requirement that universities freeze or lower tuition and maintain on-campus scholarships in order to receive National Scholarship Type II funding. Instead, they said the related budget should be transferred in full to Type I scholarships, which are awarded based on income, to increase support per student and expand assistance for middle-income students. They also recommended setting a target year for bringing government spending per student up to the OECD average and incorporating a phased funding increase plan into the National Fiscal Management Plan, while reinvesting in higher education, rather than recovering, National Scholarships funds saved as the student population declines. 

This content was produced with the assistance of AI translation services.