Gwangyang Health College on brink of closure after bankruptcy ruling

Students eligible for special transfer to nearby universities; heavy debt leaves school without a buyer

A court has declared bankruptcy against the school foundation operating Gwangyang Health College, a two-year vocational college flagged as a failing institution, paving the way for its enrolled students to transfer to other universities.

The Gwangju Rehabilitation Court's First Bankruptcy Division recently issued the bankruptcy ruling against the private school foundation running Gwangyang Health College, according to the court and Gwangyang city officials Tuesday.

A bankruptcy declaration does not automatically mean closure, but with the operational foundation gone, the Ministry of Education is expected to initiate closure proceedings.

If the school closes, its 115 enrolled students will be offered special transfers to similar departments at nearby institutions, including Suncheon University, Cheongam College, Jeil College and Han Young University of Yeosu.

The college was founded in 1994 by Lee Hong-ha, who also established Seonam University, but was later designated a failing institution after allegations of embezzlement of school funds surfaced. As its finances deteriorated, the foundation sought a financial contributor to take over the school on the condition of assuming 40.3 billion won ($26.2 million) in debt, but found no takers.

With no financial contributor found over an extended period, the school's finances continued to worsen. Enrollment shortfalls led to a wave of undersubscribed departments, and the loss of government subsidies and national scholarship funding left some departments shut down entirely.

"Departments such as nursing, physical therapy and social welfare should have relatively smooth transfers, as similar programs exist at nearby universities," an official at a regional university said. "But for some departments without clear counterparts, the Ministry of Education will need to coordinate with universities willing to take those students."