Korean Job Discussion Forums

[nrvs]

My girlfriend insists I post about this.

She first heard the rumor from one of her coworkers. This girl mentioned that some branch of government, be it local or national, has started to enforce an existing law capping hogwan tuition at W150,000 per student, per month. I think it would be very difficult for a hogwan to remain profitable with this arbitrary upper limit on tuition.

This morning she spoke to her good friend who is a teacher at the "Berkeley SAT" school in Gangnam. Starting Monday, all classes at her school are suspended for a week. She still has to go to work, but there are no students and no classes. This is, according to this woman, a penalty issued by this government body, who she identified as the Ministry of Education. She went on to say that they are targeting test prep hogwans (like hers) and large hagwons with many branches (like the Chung Dahm Institute, my girlfriend's employer).

If you haven't guessed already, I am skeptical of the rumor, and of the tuition cap law's existence to begin with. I'd not read anything here about it, nor any newspaper articles. Maybe I wasn't reading carefully, but this seems like a story Real Reality would put on heavy rotation. I would think that enforcement of this law would be big news for both foreigners and Koreans because it would drastically change the hogwan industry.

So what do all of you think?

[just because]

I think such a law probably exists but was put into place about 15 years ago and never enforced.

You know Koreans and laws, they will enforce it for a week and then it will be forgotton about for another 10 years.

I wouldn't worry to much, look at it as a holiday.

[susmin]

It is not a rumor. The ministry of education is visiting hogwans, evaluating their programs and forcing them to lower theur tuition. it is happening at my school. Some of our intensive kindergarten parents are concerned becuase we are going to have to increase class size in order to maintain a profit.

I do not know the cap. I imagine it depends on the program and the amount of hours a student attends.

[Grotto]

maintain the same profit level you mean!

I have noticed that many hogwan owners clear at least 5,000,000 won and up a month, not bad for a business that pretty much runs itself.

The two hogwans I worked at the owner walked away with a minimum of 10,000,000 won a month in profit.

250 students paying 120,000 each =30,000,000

cost for two foriegn teachers, a director, a Korean teacher, a secretary about 10,000,000 won. Lets be generous and say an operating budget of 5,000,000 won a month = profit of 15,000,000(they owned the school and the building so expenses here would be less...also a rural area)

Cost for 7 foriegn teachers, 7 korean teachers, 2 secretaries, a director lets say a max of 35,000,000.

700 studentsx150,000 won each=105,000,000-35,000,000=70,000,000 lets say about 30,000,000 won for operatiing expenses still pocketing 40,000,000 won a month.

Hogwans make tons of money otherwise there wouldnt be so many. The salary cap is being set at 250,000 won a month per student(or so I heard)

[susmin]

I imagine there is probably more overhead than that. Do not forget housing costs for teachers and upkeep for busses. At my school we also have bus drivers. I do not know what else is involved but I think there must be quite a bit of upkeep because hogwans go out of business all of the time.

[Manner of Speaking]

Although I'm sympathetic to the idea, an arbitrary 'cap' would not seem to take into account the number of hours per month the student is taught, or the quality/development cost of the curriculum. Also it seems a little strange that a government agency would be interfereing (sp?) in something that can basically be regulated by supply and demand.

Wait a minute...maybe I spoke too soon...is this cap being imposed on kindergarden hakwons, CSAT prep hakwons, English hakwons, or ALL hakwons?

[T-dot]

they are trying to enforcea cap this time. The wanted all kindy type hagwons that employ foreigners to drop their tuition by 20%. Maybe its just in kyonggi-do though. It is in my school anyways.

[Derrek]

At my old Kindy hagwon in Hannam-Dong, they charged 1 million won per month per student!

I heard from a former co-worker that the Chungdam branch was forced to cut it down to 750,000 per month (still darned expensive!)

Anyway, the parents from Hannam heard that the Chungdam branch of the same hagwon was cheaper, so now the Hannam branch had to lower its price.

So apparently, the "cap" is different depending on what the school was charging....??

[Yangkho]

Good lord. My hagwon only charges 90,000 won per student, per month.

[Derrek]

Yes, but it has movie-star and politician kids.

For this priveledge, you get to pay more more more!

[ThePoet]

[sadsac]

Businesses don't run themselves, but you have to believe through observation, that many hagwon owners do think that once they have the business up and running with students and showing profit, that they can then coast. They put great effort into opening the business and minimal effort in the day to day running of the business. We do view business in a very different way to Koreans.

[Milwaukiedave]

I know that tution at my school is 450,000 won a month. That is for kindergarten and Montessori. Usually the kids are there from 9-2 or 10-3.