Education Fever

6. The Costs of Educational Zeal

172 6 The Costs of Educational Zeal The South Korean drive to get ahead made education not only intensely competitive, but also extremely costly. As noted, education was largely paid for by students and their parents, for one of the most pronounced features of the Korean educational system was the weak ¤scal support given to it by the state. And education was not cheap. Some analysts have commented on the cost-effectiveness of South Korean education during its years of most rapid expansion, impressed that a comprehensive national educational system was built with only modest expenditure.1 This, however, is misleading. If the hidden costs of informal fees, tutoring, gifts to teachers, and supplementary classes and texts are added, it becomes clear that South Korean education in fact absorbed an enormous slice of the nation’s ¤nancial resources and was a major expenditure for the average family. Measured as a proportion of personal income, it was possibly the world’s costliest educational system. Both the ability of the state to shift the expense of education onto the consumers and the costly nature of schooling were the result of the public’s drive for educational attainment. The demand created competition to get into the highest levels of schooling and the most desirable institutions. This led to the additional expenses of out-of-class lessons, private tutoring, and a variety of often ¤nancially onerous strategies such as renting rooms in desirable districts. As with the entrance examinations, the high price of schooling and the economic distortions it caused were unfortunate by-products of the zeal for education. the costs of educational zeal 173 educational finance under the rhee administration South Korea inherited the unsystematic and improvised colonial system of¤nance that funded schooling through tuition, special school taxes, and school supporters’ associations. The U.S. military government, working within ¤nancial restrictions, continued this system. Under President Syngman Rhee, an even more bewilderingly complex and unsystematic hodgepodge of private donations , voluntary and mandatory fees, and “gifts,” as well as local and national taxes, supported education. Nationalrevenuesprimarily supported thenational universities, teachers’ colleges, and salaries of elementary teachers and staff. Maintaining school facilities was the responsibility of local government. Public schools, which accounted for about halfofall schools, received only modestsupport , mainly for the construction of classrooms. Most higher education was private and received no direct ¤nancial support from the central government. Just how much of the cost of education was covered by the national government is dif¤cult to estimate because of the large proportion of informal contributions and variable and often unreported fees. Some estimates indicate that national funds during the Rhee administration contributed only 10 percent of the cost of education.2 The funds were distributed through the provincial governments, their allocation largely determined by either the provincial governor or the county chief. School authorities, teachers, and school board members disliked the discretion given to these general administrators, and they frequently complained thatmoneyearmarkedfor education wasbeing diverted for personalor political use by these of¤cials. Local taxes also accounted for a small share of educational support. Local taxation was a complex system inherited from the Chosôn and colonial periods. The most important parts were the household assessment tax (hobyôlse), levied on all households according to their appraised rental values, and the special householdtax(t’ûkbyôlse),asurtaxonhouseholds.From1951,followingtheland reform, an additionalland incometax(t’ojisodûkse) was levied onfarmholdings. These taxes accounted for the bulk of local revenue. There were also various taxes on entertainment places, ¤sheries, and restaurants. These taxes also¤nanced other functions of local government, thus accounting for only a modest percentage of educational expenses.3 Furthermore, local taxes were collected by local government of¤cials and thus were channeled through the Ministry of the 174 the costs of educational zeal Interior, which diverted large portions for political purposes, much as it did with the national revenues.4 Additional funding was provided by a National EducationTaxenactedin1958 ,butthiswasmodestandalsosubjecttopoliticalmisuse.5 Even ifeducation hadreceivedallitsallocated funds,these wouldhaverepresented only a fraction of its needs. The South Korean state in its early years had a weak rate of tax extraction. The effective tax rate of 9.9 percent of the nation ’s GNP was low even compared to other poor states.6 Instead, the Rhee administration relied upon a variety of informal revenue-gathering strategies. Fees for education, health services, and police protection were estimated as producing three times as much revenue...