Tuesday, April 14, 2009

Koreans spending a lot on tutors, cram schools.

Earlier today we learned that the average Korean household spends over a million won annually on private tutors. This evening the Times and the Herald report that hagwon are overcharging, or at least charging more than they're reporting to the authorities. From the Herald:
Sixty-seven percent of hagwon or cram schools were found to be charging more than what they had reported to local education authorities, survey results showed.

Of some 500 hagwon inspected across the country, 358 were charging fees higher than those they had officially stated, the Education Ministry said yesterday.

About two fifths of those who overcharged were charging more than double the amount reported. Eight percent collected more than five times the officially stated fees.

Nearly three quarters of foreign language institutes were found to have underreported the fees.

All of the hagwon surveyed in Gwangju underreported their fees, while only 15 percent in Gangwon Province did so. The percentage of overcharging hagwon was 72.5 percent in Seoul.

The majority of the parents who sent their children to the 500 hagwon surveyed said the cram school fees were a burden.

Some 85.3 percent of the 1,516 parents polled said they were overwhelmed by the cost of hagwon fees.

Nearly all Korean students go to cram schools, or hagwon (학원). According to data reprinted in the Chosun Ilbo last fall:
According to research by the education ministry, 88 percent of elementary school students, 78 percent of middle school students and 63 percent of high school students attend private crammers. And on top of that, more than 300,000 Korean elementary, middle and high school students go overseas each year to study.

And for more on what Koreans are spending, here are some figures from a recent Hankyoreh article, found via this lengthy Joe Seoulman post:
Money spent on education supplementing regular school classroom learning also continues to rise. Household funds spent on tuition at private learning centers (excluding kindergarten, elementary, middle, high school, and university tuition) was 18.7230 trillion Won or 1.3295 trillion Won more than during 2007.

Household income spent on that kind of extracurricular learning in 2008 was more than the national budget spent on social welfare (18.4613 trillion Won) and ten times more the 1.8949 trillion Won on the environment.

Household expenditures accounted, according to that article, for 7.5% of the average household spending.

4 comments:

Chris in South Korea said...

There's no question that parents are paying far too much money - with no correlation to results (at least as seen in test scores or actual abilities)... but something's not adding up... 67% of hagwons charge MORE than what they had reported, while "Nearly three quarters of foreign language institutes were found to have underreported the fees."

Am I missing something here?

Brian said...

I don't understand the discrepency in percentages either. But it means that hagwons told the local education offices that they charged (for example) 150,000 won per term, but in reality they charged 300,000 won per term. Hence they underreported the fees to the education office, and thereby charged more than they reported.

m.f. said...

Well there are foreign language hagwons and then there are all the other types of hagwons out there: math, music, art, science, cooking, philosophy. Presumably the unicycle/taekwondo place on my way to work is technically a hagwon.

It too bad the article didn't say why the hagwons are underreporting their fees. It could be simply to avoid taxes, but I also got the impression last year that hagwons have guidelines in terms of how much they can charge for the services they provide. The hagwon I was at was a little more expensive than average, so apparently it had to provide extra class hours, and kids would come in once a month on Saturday for special classes to justify the 'premium' price tag.

Hagwons that are underreporting their fees may be doing so because they are charging at 'price bracket A', but only providing 'price bracket B' services.

Chris in South Korea said...

Yeah, the percentages seemed a bit high... and yet (according to the article) a majority would send their kids to MORE classes if they could... When will it end?