tokyo

The economic crisis in South Korea has left several universities facing large debts as they struggle to pay back loans and leases for new facilities and high-tech equipment, according to a report in the Korean media.

The private Dankook University is said to be the first educational institution in Korea to go under, declaring bankruptcy last Saturday (7 March). Dankook was said to have been unable to pay rising interest rates on huge loans taken out to build a campus on the outskirts of Seoul and a medical school in Chonan in South Chunchong Province.

Dollar-based repayments on loans have risen in recent months by up to 60 per cent, or 100 billion won ($62.5 million), because of the collapse in the value of the won. A report in the Korea Herald speculates that as many as ten universities may be on the verge of collapse.

Universities that have recently established medical schools and leased expensive medical equipment from overseas appear to have been hardest hit. Their problems are compounded by a reduction in subsidies because of cuts in the government's budget required by the bail-out of Korea led by the International Monetary Fund, and the growing numbers of students unable to pay fees in the economic crisis.