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[Editorial] Auditing universities

Debate on half-priced university tuition is mired in the paucity of information on the finances of the 345 institutions of higher education in the nation ― 199 universities and 146 junior colleges. Information is scant because the Ministry of Education, Science and Technology is withholding it, citing confidentiality.

But a Korean daily, quoting the ministry’s 2009 report, says five universities and eight junior colleges were so strapped for cash that they were on the threshold of closure. In 2009, enrolled students at the institutions of higher education accounted for a mere 59.7 percent of their combined quota. Undoubtedly, their lifeline was 12.66 billion won the government provided in subsidies from 2007-09.

In addition to the abovementioned cases, there must have been many more universities and colleges that have had serious financial trouble. But the ministry refuses to share information on them, citing statutory regulations, which makes it difficult for the political community and the administration to have substantive discussions on a major issue of concern ― annual tuition fees nearing 10 million won.

The administration says that no plan to provide any direct tuition subsidies is on the cards. Still, it needs to grapple with demands from students for half-priced tuition actively. It cannot afford to ignore it because it has been set as a main political agenda item since it was first espoused by the opposition and later by the ruling party.

In making their cases on the issue, neither the political community nor the administration presents basic information on the finances of universities and colleges ― including what portion of the total revenues made up by tuition fees and how much is paid out in scholarships.

Against this backdrop, the Board of Audit and Inspection is preparing to look into the books of 202 institutions of higher education. The state watchdog says it will launch an extensive audit on July 4 ― probably the most sweeping one since the 1993 inquiry into a defense procurement scandal.

The targeted universities and colleges are revolting against the planned audit, claiming that it would damage their autonomy and tarnish their image. But they have nothing to complain about because they are subject to an audit by the state watchdog as recipients of government subsidies. Such an audit is long overdue, given that the government spends as much as 5 trillion won on higher education each year.

The watchdog needs to determine whether or not subsidies have been spent as prescribed by law, look into revenue sources, see whether or not tuition fees are set at a proper level and how much money has been paid out in scholarships. The government cannot continue to provide financial support for universities and colleges without confirming that they are abiding by the accounting rules.

There is ample room for suspicion, given that tuition fees and other payments for higher education have gained 26 percent during the past five years, compared with a 16 percent increase in the consumer price index. A 2010 audit found out that a majority of private universities and colleges ignored the rule under which tuition fees were exempted for students from low-income families, which should make up 3 percent or more of students.

When the audit is completed, it will be able to vet numerous ideas on cutting tuition fees substantially, if not as much as by half, without additional government support. According to one estimate, four-year private universities are capable of cutting tuition fees by 11 percent through internal reform. An additional cut may be made possible by eliminating subsidy misappropriations. Another idea is the money-for-admission scheme ― a proposal to admit a limited number of students from wealthy families in return for contributions.

It goes without saying that the nation needs to increase spending on universities and colleges for economic advances. It also needs to spend more to subsidize the provision of higher education for students from poor families. But a 50 percent cut in tuition fees across the board would be a bad prescription for fiscal prudence.
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