February 08, 2021 13:21
The vast majority of private for-profit universities are losing money hand over fist, a report suggests.
Three out of four private universities spend more money than they earn, an increase of 2.4 times over the past six years. That is partly due to a freeze in tuition fees over the last 10 years but mostly because student numbers are dwindling as their proportion of the population shrinks.
Government efforts to bring wasteful private degree mills to heel or shut them down completely have proven largely ineffective.
Some 105 or 74.5 percent of 141 private universities nationwide suffered a deficit in 2018, according to the report by the Korean Educational Development Institute published last week. The number that made a profit dwindled sharply from 97 in 2012 to 36 in 2018.
The report covered 39 large universities with a student body of more than 10,000, 45 midsize universities with 5,000 to 9,999, and 57 small universities with fewer than 5,000 students. The number of universities in the Seoul metropolitan region that lost money jumped from 13 to 39 over the same period.
"Tuition has been frozen or reduced since 2009," KEDI said. "Many private universities have become financially vulnerable as they depend on tuition for a whopping 56.8 percent of their revenue."
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