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[EDITORIAL] Subsidy provision to Korean universities needs reform

[THE INVESTOR] Since 2013, the Ministry of Education has sought to weed out poorly managed universities as demand for higher education is forecast to drop due to the falling population of high school graduates.

Yet the ministry has made little progress thus far. Last month, Hanlyo University in Gwangyang, South Jeolla Province, announced it would close in the second half of the year, becoming the first university to do so under the incumbent government. Under the preceding administration, six universities had been shut down.

One reason for the lack of progress is that the ministry has no authority to close down a private university. Launching its initiative for structural reform of universities in 2013, the ministry has pushed for the enactment of a bill that would empower it to shut down substandard universities.

Assuming that the bill would pass through the National Assembly, the ministry has introduced an evaluation system that categorizes the nation’s roughly 300 higher educational institutions into five grades.

The bill proposed to authorize the ministry to close down universities that were given Grade E in two consecutive evaluations. Last year, the ministry carried out the first round of assessment.But the evaluation was done without valid legal grounds. The bill pushed by the ministry has failed to pass in parliament due to differences among political parties over a couple of issues.

It is true that the absence of legal authority hampers the ministry’s efforts to wipe out low-grade universities. But a bigger reason is the inconsistencies in its policies.

While pushing for the shutdown of poorly managed universities, the ministry has at the same time continued to provide financial support to them for dubious reasons.

The ministry operates a wide array of financial support programs to push universities toward the goals it has established.

For instance, it runs the PRIME project to encourage universities to shift toward industrial needs-matched education. The budget for this program is 200 billion won ($176 million) for 2016 alone. It allocates the budget to universities that have met its criteria. The total amount of financial support the ministry manages in this fashion exceeds 1.5 trillion won annually.

The problem is that the ministry operates these programs in an opaque manner, raising suspicions that ministry officials are often swayed by favoritism.

Recently, the ministry was found to have provided 60 billion won to 14 of the 26 universities that received Grade D in last year’s evaluation.

Grade D institutions are targets of drastic restructuring as they are deemed to lack the faculty, facilities and academic management needed to offer high-quality education.

The ministry used taxpayers’ money to support substandard institutions that could face closure.

As the ministry operates its support programs in such an unprincipled manner, universities with low grades are keen to build connections with it to get a share of the state funds it manages. The ministry needs to reform its management of state funds before seeking to reform universities.







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