8.3 tril. won to be set aside for 30% tuition cut

By Kim Rahn

The government will set aside 8.3 trillion won ($7.7 billion) over the next three years to effectively lower college tuition by about 30 percent by 2014 through subsidies to students, ruling party officials said Thursday.

Government officials of related ministries and Grand National Party (GNP) leaders agreed on the plan in an emergency meeting Wednesday night, the officials said.

The agreement comes about one month after GNP floor leader Hwang Woo-yea pledged to solve the high tuition issue in an apparent attempt to woo voters ahead of the National Assembly and presidential elections next year, following growing calls from students and citizens to cut tuition.

Under the agreement, a total of 8.3 trillion won — 6.8 trillion won from state funds and 1.5 trillion won from colleges — will be spent to lower fees. Among those present at the meeting were Hwang, Strategy and Finance Minister Bahk Jae-wan and Education, Science and Technology Minister Lee Joo-ho.

“The government will provide 1.5 trillion won next year, 2.3 trillion won in 2013 and 3 trillion won in 2014 to universities to help them cut their tuition. Along with 500 billion won each year from schools, the money will lower tuition by 15 percent in 2012, 24 percent in 2013 and 30 percent in 2014 compared to current fees,” Hwang said in a media briefing in Seoul.

Of the 1.5 trillion won for next year, 200 billion won will be spent for expanding national scholarship programs. “By 2014, students from families in the bottom 10-percent income bracket will receive scholarships. We’ll also seek to remit interest on student loans during the period male students complete their military service,” Hwang said.

The government currently offers 500 billion won per year to students of families receiving livelihood subsidies.

Universities will also be encouraged to use 500 billion won every year for scholarships. Schools making efforts on their own for tuition cuts will get incentives.

Besides the plan, the GNP will try to expand the government budget for higher education as a proportion of gross domestic product to the OECD average of 1 percent from the current 0.6 percent.

It will also seek to restructure poorly managed colleges, passing relevant bills at the National Assembly plenary session this month. Tax benefits for donations to colleges will also be discussed.

Whether college tuition will be cut as planned, however, remains to be seen, because some officials said it is an agreement between the government and the ruling party in a broad sense and not a final decision.

“We need consent from opposition parties at the House session in September to set up the budget, and we need to decide on the details of the plan with the government. We’ll keep making efforts to produce positive results,” said Rep. Lee Joo-young, the GNPchief policymaker.

A spokesman of the finance ministry also said the government and the GNP didn’t reach an agreement on the exact amount of budget support, adding the amount was only the latter’s proposal.

Universities generally welcomed the plan but said they needed to discuss some of the measures before accepting it, adding that providing 500 billion won every year would not be easy.

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