Trading hagwon for home study

In seven weeks, Moon Doh-ju will sit for the Secondary School Admission Test, a crucial step as the eighth-grader attempts to attend a top boarding school in America.

While Moon is confident, her mother, Lee Daw-hwa, is a bit anxious. Nearly all of Moon’s friends have used Korean tutoring centers, or hagwon, to beef up their test-taking prowess.

But Lee decided last year to forgo the popular-yet-pricey option and have her daughter study more at home in an effort to save money. Now, the mother of two admits she’s “slightly afraid” that her older daughter isn’t as prepared as she could have been.

“[Doh-ju’s father] wanted to save money for when she travels to the [boarding] school,” Lee said, “so we decided that she will study at home with books and with us.”

The country’s massive hagwon industry continues to grow. Families in Korea spent 20 trillion won ($16 billion) on private education last year - up 5 percent from 2007 - and eight in 10 students were actively engaged in after-school tutoring.

But many parents looking to send their children to overseas boarding schools have decided to skip hagwon in favor of cheaper tutoring services. They’re also seeking out less expensive schools abroad and even exploring domestic options as a last resort.

Blame it on the economic downturn and a shaky won, which have made it much more difficult for families here to send their children abroad for schooling.

“Boarding school numbers have gone down,” said Paul Yi, owner of EPS Education Consulting, which operates a 10-week summer tutoring program that caters to about 100 students. “And it’s because of the economy.”

Recently, Yi said, parents of middle school students have come to EPS with the same question: Where are the cheaper schools? That question may be warranted now more than ever, as the total cost of top British and U.S. boarding schools such as Brighton College and Phillips Exeter Academy can reach 50 million won a year. Although the won has recovered a bit versus the U.S. dollar in recent months, it had slipped significantly earlier in the year.

“She will apply only to second- and third-tier schools, because we cannot afford the top ones,” said Yoon Jin-sun of her 13-year-old daughter, Hwang Seo-yi. “But there are plenty of good schools that she can still apply to.”

Some families also have moved to online test, language and course preparation, mirroring the rise in Web sites focusing on such areas, said Lynn Ilon, an education professor specializing in the economics of education at Seoul National University.

It makes sense that they are looking to the Web, Ilon said. “They have less money to spend, so they’re clearly going to have to make decisions on how to spend it.”

On average, a Korean family spends 233,000 won a month in hagwon fees per child. But some Web services charge as little as 40,000 won for an online course with up to 60 hours of content.

Megastudy.net, which boasts roughly 2,500 courses that prepare nearly 3 million Korean students for admission exams and specific subjects, has benefitted from this trend, defying the recessionary forces that are squeezing industries across the country.

In its second-quarter earnings report released last month, the Seoul-based online tutoring giant posted 56 percent growth in net profit over last year and saw a 29 percent increase in business from middle school students.

But as middle- and low-income families have had to scale back, many wealthy families can still afford to send their children to expensive hagwon and then on to world-class boarding schools. This widening divide is just one of the many effects of a recession on education, Ilon said. Still, she added, there might be a broader shift away from hagwon in the future, as the next iteration of the economy likely will value creativity over memorization.

“Parents may rethink whether or not they send their kids to [hagwon],” Ilon said.

By Devin Banerjee Contributing Writer [devin.banerjee@gmail.com]