University funding abuses

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University funding abuses

As the ruling party mulls measures to ease university tuition fees, a group of university heads held a meeting at which they pledged to accelerate restructuring of campuses in the country. After the meeting, the Korea University Education Council - a body of university presidents and chancellors - announced that they would ask the government for additional funding while trying to utilize university foundations’ reserve funds and make more efficient use of university finances.

But those measures stop way short of our expectations because it is unfair for universities to shift their financial burden to the government while engaging in lax school management. They should implement austerity measures first and then seek to either lower tuition or offer more scholarships to offer better services to students.

Universities have long been accused of inflating their budgets in order to raise tuition. In trotting out their annual budget proposals, many of them deliberately decrease income and inflate expenses to save billions of won. Yet they cite the proposed budget to justify their plans for tuition hikes.

Not a few universities habitually launder faculty subsidies without receipts and invoices to back up the expenditures. In an audit last year, 19 private universities were penalized for accounting malpractices. To put these practices to an end, universities must legitimize their financial operations and make public their financial papers to ensure transparency. Through efficient financial management, they can figure out ways to lower tuition.

Universities also need to restructure their use of reserve funds. The reserve funds at 149 four-year private universities amounted to 7 trillion won ($6.5 billion) last year. Of that amount, 46 percent was spent to renovate and build campus facilities, while only 8.6 percent was reserved for student scholarship programs.

It is wrong to build reserves from tuitions, but it is worse to use reserves to upgrade university facilities. These institutions must instead increase student scholarships to ease their students’ financial burdens. Suwon University, for instance, announced that it will use 25 billion won from its 32 billion won reserve to create scholarships beginning in the second semester. Vision University in Jeonju also cut tuition for sophomores and juniors by 2.3 percent this year by saving on money for construction, recruiting and other purposes. If these universities can save and offer better student support, there’s no reason why others cannot.
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