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Cablegate: "Surging" Private Education Costs Fuel Reform


DE RUEHUL #1770/01 3090824
R 050824Z NOV 09



E.O. 12958: N/A

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

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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.


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

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

--------------------------------------------- -
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

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

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."

© Scoop Media

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