Thursday, August 26, 2010

Government Puts Loan Restrictions on Under Performing Universities

Since coming to Korea, I have consistently heard from Koreans and Westerners that the University system here is rather a joke.  High schools in Korea of course are extremely demanding and difficult.  However, once a high school graduate is accepted into a community or state university, they are virtually guaranteed a degree and much effort is required to not be simply passed through the system.  Except for a very exclusive club of Korean universities in Seoul, a degree from any other university in Korea is not worth much.

As of right now every student in the country can borrow 100% of their tuition needs in government loans.  However, the government recently has announced a plan to address their under performing university system.  Article from the Korea Herald:
The government plans to reveal a list of 50 “low-performing” colleges that are subject to restriction in their student loans, education officials said Wednesday. 
The Ministry of Education, Science and Technology recently judged the nation’s 345 private and national universities and vocational schools, and selected 50 schools, about 15 percent of the total, for the credit restriction.
Depending on their credit ratings, students in 44 schools will be allowed to get 70-percent of student loans, while those in six others borrow only 30 percent of their tuition, the ministry explained. 
Under the current state student loan system, college students can borrow their full tuition costs and are allowed to defer paying back their loans until they obtain employment at a workplace. 
However, students from low-income families will be able to apply for student loans without restriction, the ministry added. 
“We have decided to reveal the list of the low-performing schools in order to improve education environment in colleges. The student loan system is a kind of compensation for schools’ efforts for better education services,” said a ministry official.
The ministry will announce the list next week before schools start accepting next year’s applicants on Oct. 8, officials said.
Even though the announcement imposes only the credit restriction, controversies are likely to continue. Colleges involved are already resisting fiercely to the decision, fearing such revelation could brand their school members. 
Observers also say that the government move is aimed at encouraging schools to start restructuring by themselves. 
According to parliamentary data, almost 10 percent of colleges nationwide cannot meet their 70 percent of quorum currently.
During the confirmation hearing on Monday, Education Minister-designate Lee Ju-ho also said, “The revelation (of credit delinquent schools) would send a signal for restructuring in colleges.”

So, there are 345 private and national universities in the country and the government allows every student to borrow up to 100% of their tuition costs.  It has singled out fifty universities to punish for being so crappy by penalizing the students who decide to go there and prevent them from taking out their full loan amounts.  Harsh.  But they did say student's from low-income families will still be eligible for the full loan amounts.

I suppose this should make every university that did not make the list a little more competitive because students who need (or just want) the financial assistance will obviously try and compete more to get into the better universities.  The list of fifty universities that were black listed will also probably try hard to get off the list next year and this might in fact cause this "restructuring" that the government expects.
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