2025 marked the beginning of a trend of tuition increases at private universities, coupled with significant government financial support, leading to a historic milestone this year as the total budget for private universities in South Korea surpassed 76 trillion won for the first time.
According to the "2026 Budget Analysis for Private Universities (including Junior Colleges)" released by the Korea Foundation for the Promotion of Private School Education on July 10, the total budget for private universities nationwide reached 76.3263 trillion won, a 12.3% increase from last year’s 67.9482 trillion won.
The core budget for university finances, the general fund, increased by 5.8% to 26.9328 trillion won. Among the revenue sources, tuition and fees accounted for the largest share at 14.2622 trillion won, up 6.2% from the previous year. Additionally, government subsidies, bolstered by initiatives like the Glocal University 30 and the Anchor (formerly RISE) project, rose by 10.4% to 5.7604 trillion won. The budget for industry-academia cooperation, which reflects the universities' research capabilities, also saw a significant increase of 14.4%, reaching 11.6461 trillion won, driving overall budget growth.
However, this apparent growth masks a serious structural financial crisis. Universities, hit hard by declining school-age populations, are unable to cover even the minimum fixed costs, such as staff salaries and building maintenance, despite fully utilizing their tuition revenue. Notably, over 60% of total tuition revenue is concentrated in universities located in the capital region, forcing non-capital region universities to invest more in education to attract students.
The disparity in tuition revenue between capital and non-capital region universities is stark. This year, private universities generated a total tuition revenue (excluding fees) of 13.5023 trillion won, with capital region universities (65 institutions) accounting for 6.8963 trillion won, or 62.0% of the total. In contrast, non-capital region universities (89 institutions) garnered only 4.2348 trillion won, or 38.0%.
Notably, the rate of increase in total educational investment (including salaries, research, student expenses, and industry-academia cooperation) is significant. This year, total educational investment for private universities reached 31.7307 trillion won, an 8.0% increase from the previous year. For general universities, non-capital region institutions saw an educational investment increase of 8.8% (10.4040 trillion won), surpassing the capital region's increase of 7.4% (16.3131 trillion won). Junior colleges also experienced a higher increase in non-capital regions (8.9%) compared to the capital region (7.5%). This suggests that non-capital region universities, facing a decline in school-age populations, are prioritizing educational investments for scholarships and improving educational environments to attract students.
A breakdown of expenditures reveals the vulnerability of university financial structures. This year, staff salaries accounted for the largest share of the private university general fund at 10.3159 trillion won, representing 38.3% of the budget, but the increase was managed at a stable rate of 3.3%. In contrast, operational costs, including maintenance and utilities, rose by 6.0%, while research and student expenses, including scholarships, increased by 7.3%. Expenditures on assets and liabilities, such as land and building acquisitions, surged by 10.1%.
The combined minimum fixed costs, including salaries and operational expenses, reached 13.9387 trillion won, exceeding the net tuition revenue of 13.5023 trillion won by 103.2%. This indicates that tuition alone is insufficient to cover the basic operational costs of universities. In response to government initiatives encouraging the use of reserve funds, universities have increased withdrawals from their reserves for comprehensive educational improvements, including 5.772 trillion won for construction funds.
The analysis underscores that recent tuition increases at private universities are not merely for financial accumulation but are a necessary choice for survival. Without efforts to secure additional resources through government subsidies or donations (both up by 5.0%) and other income from the Ministry of Education, normal operations are unsustainable.
While the secured resources are being directed toward enhancing student benefits and educational quality, such as increasing research and student expenses (up 7.3%) and expanding educational investments (up 8.0%), the ongoing concentration of tuition revenue in capital region universities poses a significant risk to the financial viability of non-capital region institutions.
Hwang In-sung, Secretary General of the Korean Council of Private University Presidents, stated, "We should not rely solely on uniform government financial support programs. Considering the rapid inflation and the financial limitations of universities, the current tuition increase regulation policy needs to be re-evaluated. It is urgent to relax regulations to allow universities to autonomously adjust tuition and manage funds transparently, while also developing diverse financial support measures for non-capital region universities."
Hwang further emphasized the need to explore ways to utilize excess tax revenue from the semiconductor boom for higher education, suggesting the establishment of a future response fund to invest in the next generation, including youth and local talent, directly supporting graduate programs and research personnel in advanced fields such as AI, semiconductors, and biotechnology by breaking down funding barriers.
According to the "2026 Budget Analysis for Private Universities (including Junior Colleges)" released by the Korea Foundation for the Promotion of Private School Education on July 10, the total budget for private universities nationwide reached 76.3263 trillion won, a 12.3% increase from last year’s 67.9482 trillion won.
The core budget for university finances, the general fund, increased by 5.8% to 26.9328 trillion won. Among the revenue sources, tuition and fees accounted for the largest share at 14.2622 trillion won, up 6.2% from the previous year. Additionally, government subsidies, bolstered by initiatives like the Glocal University 30 and the Anchor (formerly RISE) project, rose by 10.4% to 5.7604 trillion won. The budget for industry-academia cooperation, which reflects the universities' research capabilities, also saw a significant increase of 14.4%, reaching 11.6461 trillion won, driving overall budget growth.
However, this apparent growth masks a serious structural financial crisis. Universities, hit hard by declining school-age populations, are unable to cover even the minimum fixed costs, such as staff salaries and building maintenance, despite fully utilizing their tuition revenue. Notably, over 60% of total tuition revenue is concentrated in universities located in the capital region, forcing non-capital region universities to invest more in education to attract students.
The disparity in tuition revenue between capital and non-capital region universities is stark. This year, private universities generated a total tuition revenue (excluding fees) of 13.5023 trillion won, with capital region universities (65 institutions) accounting for 6.8963 trillion won, or 62.0% of the total. In contrast, non-capital region universities (89 institutions) garnered only 4.2348 trillion won, or 38.0%.
Notably, the rate of increase in total educational investment (including salaries, research, student expenses, and industry-academia cooperation) is significant. This year, total educational investment for private universities reached 31.7307 trillion won, an 8.0% increase from the previous year. For general universities, non-capital region institutions saw an educational investment increase of 8.8% (10.4040 trillion won), surpassing the capital region's increase of 7.4% (16.3131 trillion won). Junior colleges also experienced a higher increase in non-capital regions (8.9%) compared to the capital region (7.5%). This suggests that non-capital region universities, facing a decline in school-age populations, are prioritizing educational investments for scholarships and improving educational environments to attract students.
A breakdown of expenditures reveals the vulnerability of university financial structures. This year, staff salaries accounted for the largest share of the private university general fund at 10.3159 trillion won, representing 38.3% of the budget, but the increase was managed at a stable rate of 3.3%. In contrast, operational costs, including maintenance and utilities, rose by 6.0%, while research and student expenses, including scholarships, increased by 7.3%. Expenditures on assets and liabilities, such as land and building acquisitions, surged by 10.1%.
The combined minimum fixed costs, including salaries and operational expenses, reached 13.9387 trillion won, exceeding the net tuition revenue of 13.5023 trillion won by 103.2%. This indicates that tuition alone is insufficient to cover the basic operational costs of universities. In response to government initiatives encouraging the use of reserve funds, universities have increased withdrawals from their reserves for comprehensive educational improvements, including 5.772 trillion won for construction funds.
The analysis underscores that recent tuition increases at private universities are not merely for financial accumulation but are a necessary choice for survival. Without efforts to secure additional resources through government subsidies or donations (both up by 5.0%) and other income from the Ministry of Education, normal operations are unsustainable.
While the secured resources are being directed toward enhancing student benefits and educational quality, such as increasing research and student expenses (up 7.3%) and expanding educational investments (up 8.0%), the ongoing concentration of tuition revenue in capital region universities poses a significant risk to the financial viability of non-capital region institutions.
Hwang In-sung, Secretary General of the Korean Council of Private University Presidents, stated, "We should not rely solely on uniform government financial support programs. Considering the rapid inflation and the financial limitations of universities, the current tuition increase regulation policy needs to be re-evaluated. It is urgent to relax regulations to allow universities to autonomously adjust tuition and manage funds transparently, while also developing diverse financial support measures for non-capital region universities."
Hwang further emphasized the need to explore ways to utilize excess tax revenue from the semiconductor boom for higher education, suggesting the establishment of a future response fund to invest in the next generation, including youth and local talent, directly supporting graduate programs and research personnel in advanced fields such as AI, semiconductors, and biotechnology by breaking down funding barriers.
* This article has been translated by AI.
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