"Even in Gangnam..."

▽The current situatoin= `A` private institution in Daechi-dong, Gangnam-gu is having headaches with students delaying their tuition fee payments. Around 10% of students, not only those taking all round classes but also one or two classes, are not paying their fees for 2 to3 months.

One official of the instition said, “Currently we are witnessing several months of delinquency in tuition payments, which were not seen even during the financial crisis.” He also added, “We can`t scold students to bring the fee. It is very serious situation.”

Number of students paying the fee with credit card installment increased markedly. In case of the private institution `B`, more than half the students are paying in credit cards, and among them, the percentage of students paying in installment jumped from 10% last year to around 60% recently.

This phenomenon is most vivid in mid-sized all-round institutions, but single subject specializing institutions are having hard times as well.

Chief of `C` mathematics specializing institution, which is known to be relatively `popular` in this region, said, “Increasing number of parents are complaining that tuition fee is to high, and they also carefully consider various factors when they choose to take classes from our institution.”

Thus, realtors who mediated trade of institutions are also on alarm. One real estate related official said, “In the past, in June when summer vacation approaches, institutions were busy opening new special classes. However, this year it was half the level of last year.”

Also, building rents are surging, but as premiums on those buildings fell by more than 1/3, institutions are facing managerial problems as well.

One person related to an institution `D` which has put its offices for sale said, “Premium has plummeted from 90million won last Sep to 50million now, but there is no one willing to move in.” He added, “this place used to be the most popular site for private institutions even within Daechi-dong, but now there isn`t anyone even asking about the rent.”

▽Reason=Major reason is prolonged economic recession

Korea Development Institute researcher Woo Chon-sik said, “It shows that even high income classes, except for the richest ones, are having difficult times, and that their capacity to spend for education has reached a limit.” He analyzed that, “We can say that private institutions in Daechi-dong were continuously expadind, but now they are in a correction period with economic slowdown.”

National Private Institutions Association`s Gangnam council chairman Chang Myung-ju said, “When we look at the entire Gangnam region, it is hard to say that the private educations market has shrunk.” He explained, “the private educations market is polarizing into either large-sized institutions or small scale tutoring, leading to collapse of medium sized institutions.”

He said “Of course some households above middle income classes are feeling burdens of private education expenses, but as children from the richest families in Korea are taking private tutoring with high lesson fees, managerial difficulties of private institutions are mounting.”

Hyo-Lim Son aryssong@donga.com