The Ministry of Education said Sunday it will publicly announce the enforcement decree for the Private University Restructuring Act. The move is a follow-up measure after the National Assembly passed the act in August last year to support private universities facing crises from declining school-age population.
Experts project that the freshman enrollment rate at Korean universities will drop to 53% by 2043. The National Assembly Futures Institute also forecast that large-scale enrollment shortfalls will begin in earnest from 2036, with the freshman enrollment rate reaching only 58.8% by 2040. This is the backdrop for the growing need for preemptive restructuring of private universities.
The enforcement decree contains the legal basis and detailed procedures for designating financially distressed universities and supporting structural improvement, alongside existing financial assessments of private universities.
Under the decree, provisions for the attribution of residual assets and appointment of liquidators will apply to support the liquidation of schools or foundations that are closed or dissolved. For universities designated as financially distressed, restrictions on the use of reserve funds and standards for disposing of held assets will be eased if they carry out structural improvement implementation plans aimed at normalization. Dissolving school foundations will be able to receive a portion of residual assets as dissolution settlement funds or contribute them to public interest corporations or social welfare corporations.
Legal protections for university members including students and faculty will also be established. The decree supports transfer admissions for students of closing universities and provides academic discontinuation consolation payments from residual assets if students forgo transfer admission. Faculty dismissed due to closure will receive dismissal compensation or retirement consolation payments from residual assets, and research activities of researchers at closed universities will be protected to ensure they do not face discrimination or restrictions in academic and R&D activities. Additionally, those who fail to comply with corrective orders related to embezzlement of school assets or accounting fraud will be excluded from dissolution settlement fund payments. The Ministry of Education plans to enact and promulgate the enforcement decree in time for the Private University Restructuring Act's implementation on August 15.