VZCZCXYZ0000
RR RUEHWEB

DE RUEHUL #1770/01 3090824
ZNR UUUUU ZZH
R 050824Z NOV 09
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 6145
INFO RUCNKOR/KOREA COLLECTIVE
RHHMUNA/USCINCPAC HONOLULU HI
RHMFIUU/COMUSKOREA J5 SEOUL KOR
RUACAAA/COMUSKOREA INTEL SEOUL KOR
RHMFISS/COMUSFK SEOUL KOR

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