South Korea Unveils Plan to Aid Private University Restructuring

South Korea’s Ministry of Education has announced new draft legislation aimed at systematically supporting private universities facing challenges due to the nation’s declining school-age population. The proposed Enforcement Decree for the “Act on Support for Structural Improvement of Private Universities” seeks to stabilize financially struggling institutions, protect students and faculty, and enhance the overall competitiveness of higher education.

The legislative notice, released on April 6, 2026, outlines a comprehensive framework for identifying and assisting private universities in need of structural reform. Key provisions include the establishment of a basic plan for university restructuring by the Minister of Education, following deliberation by a dedicated Private University Structural Improvement Deliberation Committee. The decree also empowers the Ministry to conduct annual financial diagnoses of private universities and designate those deemed “financially troubled” based on specific criteria, such as financial health or non-compliance with data submission requirements.

Once designated, these universities and their operating school foundations will be required to formulate and submit a structural improvement implementation plan within 30 days of receiving management consulting. To facilitate this, the decree introduces special provisions allowing financially troubled universities to flexibly use or dispose of their assets. This includes redirecting specific reserve funds, such as construction or research funds, to support restructuring efforts, and even selling or using basic assets as collateral under certain conditions. Furthermore, the legislation provides special support for universities pursuing mergers or consolidations, potentially easing faculty-to-student ratio requirements to encourage viable partnerships.

The draft decree also addresses procedures for university dissolution, defining eligible public interest corporations that can receive remaining assets from dissolving school foundations. Strict criteria will be applied to prevent assets from being transferred to entities involved in past misconduct or lacking financial stability. Additionally, the decree stipulates conditions under which dissolution settlement funds may be withheld or reduced from school foundations or individuals who have failed to comply with corrective requests or committed serious financial offenses.

The Ministry of Education is currently soliciting public feedback on this crucial legislative proposal. Interested institutions, organizations, and individuals are invited to submit their opinions on the draft amendment by May 18, 2026. This public comment period ensures that diverse perspectives are considered before the finalization and implementation of the Enforcement Decree, which is expected to play a vital role in shaping the future of private higher education in South Korea.

Source: 법제처 — Original Article (Korean)