The Ministry of Education said Tuesday that the Cabinet approved an enforcement decree detailing restructuring procedures and support measures for private universities, ahead of the Private University Structural Improvement Act taking effect on Aug. 15.
Under the decree, the ministry may conduct financial assessments and on-site investigations of private universities to designate or remove institutions from a list of financially distressed schools. When issuing a structural improvement order, the ministry must notify the relevant university and its school foundation in writing, specifying the required actions and deadlines. Universities and foundations that receive such an order must submit a compliance report upon completing the required measures.
The decree also establishes an operational framework for a dedicated agency designated by the education minister, along with formal financial assessment procedures, to provide systematic support for private university restructuring.
Universities under financial crisis management that carry out a structural improvement plan will benefit from eased requirements, including relaxed standards for disposing of assets, maintaining faculty ratios and restricting the use of reserve funds. Dissolving school foundations will be allowed to receive a portion of remaining assets as a dissolution settlement or donate them to public-interest or social welfare organizations.
The decree also includes protections for students and faculty affected by school closures. Faculty members dismissed due to a closure will be entitled to severance compensation or retirement allowances within the limits of remaining assets. Researchers affiliated with closed universities will also be protected from discrimination or disadvantage in their academic and research activities.
In addition, the ministry will operate a records management system for closed universities to support the issuance of graduation and career certificates. Students from closed institutions will be eligible for transfer admissions, and those who choose not to transfer may receive a study-discontinuation allowance from remaining assets.
The decree tightens sanctions against school foundations found guilty of serious violations such as breach of fiduciary duty, embezzlement or accounting fraud. Foundations with special ties to officers of public-interest or social welfare organizations who have committed such offenses will be barred from donating remaining assets to those bodies. Foundations penalized for embezzlement, breach of fiduciary duty or accounting fraud that have failed to comply with corrective orders will be excluded from dissolution settlement payments.
"Through this enforcement decree, we will build a system that supports proactive restructuring and management normalization at private universities, strengthening the competitiveness of higher education and promoting their sound development," Education Minister Choi Kyo-jin said.
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