"SURGING" PRIVATE EDUCATION COSTS FUEL REFORM

UNCLAS SEOUL 001770 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: PGOV KS SUBJECT: "SURGING" PRIVATE EDUCATION COSTS FUEL REFORM ¶1. (SBU) SUMMARY: President Lee Myung-bak made educational reform one of his campaign promises in the 2007 presidential election. Since then, the administration has made a number of attempts to effect change, motivated in large part by the enormous financial burden private educational expenditures place on Korean families. Among OECD countries, Korean parents spend the most on education -- 2.9 percent of GDP (2006) compared to the OECD's average of 0.8 percent. Conversely, government spending on education (4.3 percent of GDP) is below the OECD average (5 percent). Lee has won approval for two key proposals -- limiting hagwons and improving education opportunities -- but other, fundamental problems remain. Pressure on President Lee to address the problem will continue to mount as the economic pressure of Korea's emphasis on education achievement is a key factor in Korea's looming demographic crisis. END SUMMARY. -------------- Education Fever -------------- ¶2. (SBU) The National Statistic Office reports that Korean parents spend 2.9 percent of GDP on private education, reflecting an immense dissatisfaction with public education that has severe financial implications for Korean families. More than 3 out of 4 Korean students receive some sort of private tutoring, and, according to the Bank of Korea, the ratio of education spending to total household consumption stood at 7.4 percent in the first half of 2009 -- compared to the U.S. rate of 2.6 percent. At the heart of this spending is what scholar Michael Seth calls "education fever," or the Korean obsession with academic achievement. In the Korean context, educational success is a determinant of socioeconomic success, and an advanced degree from a prestigious university -- Seoul National, Korea University, or Yonsei -- is seen as the key to getting a good job and an affluent life. Consequently, parents will spare no expense to ensure that their children have an extra edge on the college entrance exam. -------------- Hagwons -------------- ¶3. (SBU) Hagwons (private, extracurricular education institutions) are a big and growing problem for education reform efforts. The Korea Times reported that there are 34,529 registered hagwons in Korea, but, when including unregistered institutions, the number was around 80,000, according to the Korean Association of Foreign Language Associations (KAFLA). Between December 2007 and June 2009, the number of hagwons in Gangnam-gu -- an affluent area of Seoul -- doubled from 599 to 1,218. ¶4. (SBU) The increase in Hagwons mirrors the growth in intense competition in Korean schools. Since the 1990s, hagwons have evolved from a luxury of the elite into what is now a necessary replacement for public education, which Korean parents perceive as inept and failing. Hagwon curriculum is designed to help students gain entrance to elite universities by preparing middle school students for acceptance in specialized high schools and by helping high school students perform better on the national standardized college entrance exam, which is almost the sole factor in deciding university admittance. The need to score better than one's peers drives families to spend more and more on education in a vicious -- and hard to stop -- cycle. While the biggest spenders on hagwons are the rich, the largest group of consumers are the middle-class. In a September poll by Hankook Research, 44 percent of middle class respondents said that education was their biggest economic burden -- that number was more than double those who chose food costs. ¶5. (SBU) The Lee Administration has made several attempts to address the problem of private education expenditures. Lee's proposals to "normalize" education include limits on hagwon fees and hours. In July 2009, the Blue House issued an executive order that all hagwons must close by 10 p.m. or pay a stiff fine. On October 29, the Constitutional Court ruled that limitations on fees and hours are constitutional, allowing the policy to move forward. The administration remains committed to addressing the issue; presidential confidant and Anti-corruption and Civil Rights Commission chief Lee Jae-o recently weighed in calling for more efforts to clamp down on "surging" private education costs. -------------- College Entrance Exams Fuel the Problem -------------- ¶6. (SBU) Targeting the hagwons, however, will not solve Korea's education problem. The leftist Korean Teachers and Education Workers Union (KTU) said that limiting the activities of hagwons was a politician's solution -- a relatively easy policy with potential short-term gains. A real solution would tackle the heart of the problem -- universities' over-reliance on standardized college entrance exams. ¶7. (SBU) If college entrance criteria were broader and included school grades and other activities, hagwon attendance would become less important. Seoul National University (SNU) has been experimenting with such a system in an attempt to ensure greater regional representation -- especially from historically disadvantaged areas. Through this program, now in its fifth year, 25 percent of incoming students are admitted based on their high school grades, not on entrance exam scores. Before the program, of the roughly 1,200 high schools in Korea, only 400 sent students to SNU. Now about 900 schools are represented at the elite institution. According to SNU's assessment of these students' performance, students admitted through this program actually performed better on average at university than their peers. -------------- - Specialized v. Autonomous Private High Schools -------------- - ¶8. (SBU) Special entrance programs that favor students from specialized high schools -- like foreign language schools -- are also cited as a source of the private education problem. Some experts think that the vicious cycle of education starts in elementary school when parents start preparing their children to enter these specialized schools that almost guarantee graduates a slot at elite universities. Admittance to these specialized schools -- many of which focus on teaching English language -- is decided solely by an entrance examination. ¶9. (SBU) In an effort to provide a more affordable alternative to public education, the Lee Myung-bak Administration enacted an initiative to create 100 new autonomous high schools by 2010. Admittance to these schools would be open to students ranking (based on school grades, not tests) in the top half of their class. A lottery would then decide which students were accepted. Critics have argued that the expense of these schools -- 2.5 times higher than public high school but still cheaper than specialized schools -- will exacerbate the gap between rich and poor. (NOTE: Education through middle school is compulsory, and funded by the government. Students pay tuition to attend public high school in Korea. END NOTE.) To counter this criticism, the government plan calls for 20 percent of the autonomous schools' student body to consist of low income students whose tuition and fees will be provided. Thirteen schools in Seoul were given this "autonomous" status, meaning that half of their curriculum is government-prescribed and half is developed independently. Students will start attending these schools from next year. ¶10. (SBU) The looming implementation of this plan has renewed focus on the specialized schools and prompted some lawmakers to propose turning the specialized schools into autonomous schools. In late October, amid a brewing political controversy, President Lee ordered Korean education authorities to come up with a solution to the demand for private education caused by the decades-old specialized school system. Proponents of converting the specialized schools say this would decrease the need for private education. -------------- Political Priority -------------- ¶11. (SBU) The government is feeling ever-increasing pressure to find a solution, and quick. The financial toll that private education expenses exact on families is only part of the problem. The high cost of raising children is a key factor in the decision of many Korean couples to have only one or no children. The resultant low birthrate is creating a demographic crisis; Korea's fertility rate last year was 1.19 children per woman -- well below the OECD's average of 1.73 -- meaning that Korea's population could start declining in 2018. Furthermore, there are more well-educated young people than there are white-collar jobs in Korea, resulting in high underemployment rates among university graduates; in late September the Education Ministry said that only 40 percent of four-year college graduates landed full-time, contract jobs. (NOTE: Not all graduates are seeking employment, but this was the lowest figure since the ministry launched the survey in 2004. END NOTE.) ¶12. (SBU) For President Lee, the key is to find a solution to the problem that helps middle class families and avoids allegations that the solutions are further exacerbating Korea's divide between rich and poor, urban and rural. His efforts to limit hagwon activities and to improve public education by starting autonomous private high schools have faced allegations that the policies primarily benefit wealthy students. Meanwhile, FTU contended that the best way to improve public education was by increasing the teacher-student ratio and improving the quality of teachers. Instead, they said referencing a period in Korean history when only elites had access to the best education, because of the government's proposals "it feels like we are going back to 1973." STEPHENS