Korea Underfunds Universities Despite Strong K-12 Spending

Per-student public education spending for South Korean elementary, middle, and high school students far exceeds the OECD average, but spending on university students ranks near the bottom among member countries. According to the Ministry of Education’s “OECD Education Indicators 2025,” per-student public spending for university students in 2022 was $14,695 (about 20.38 million won), only two-thirds of the OECD average of $21,444. Underinvestment in higher education has persisted for years without significant improvement.

Public education spending refers to all government and private household expenditures, excluding private tutoring costs. In most OECD countries, per-student spending rises at higher education levels, but South Korea shows the opposite trend. Annual per-student spending for university students is roughly 7 million won less than for elementary students and 14.7 million won less than for middle and high school students. Elementary and secondary schools receive 20.79 percent of domestic tax revenue through grants, allowing budgets to grow regardless of declining student numbers, with trillions of won accumulated in funds each year. In contrast, university tuition has been frozen for 16 years, and government investment in higher education remains far below the OECD average.

Financial strain at universities is eroding their competitiveness. According to the Swiss-based International Institute for Management Development, South Korean universities fell from 38th in global rankings in 2015 to 49th in 2023. Considering the country’s overall competitiveness ranking remained relatively stable, moving from 25th to 26th, the drop in university competitiveness is striking. Domestic universities are losing top faculty to overseas institutions, and the research output of remaining professors has sharply declined.

Declining university competitiveness could have long-term consequences for national competitiveness. The government promotes ambitious policy goals, such as AI talent development, which require significant funding, yet chronic financial difficulties are worsened by strict tuition regulations. With limited tax revenue, government support has its limits. Unless the country is willing to abandon high-level talent development, it is appropriate to relax tuition caps, which are unusual by international standards. Above all, the rigid separation of education grants, often used by elected local superintendents for populist spending, should be dismantled so that funds can support universities on the brink of collapse.