The government and the ruling Grand National Party (GNP) have drafted a plan to spend 2 trillion won (US$1.8 billion) next year to lower college tuitions by 10 percent on average, party officials said Thursday.
The plan comes about one month after GNP floor leader Hwang Woo-yea vowed to make the college tuition issue the top policy priority as the beleaguered party mulls a package of welfare measures to woo voters ahead of next year's general and presidential elections.
It has since been one of the hottest issues in South Korea, with students holding street protests amid criticism that the rival parties are seeking populist policies ahead of elections without enough consideration of the impact such policies would have on the country.
President Lee Myung-bak holds a negative stance on what has been dubbed the "half-priced tuition" push. He has called for a careful approach to the issue that would take an enormous budget to implement and said last week that it is impossible to halve tuition fees.
On Wednesday night, Hwang held a meeting with Finance Minister Bahk Jae-wan and Education Minister Lee Joo-ho and agreed on a plan calling for spending 2 trillion won next year on lowering tuitions, party officials said.
For universities that freeze tuitions in the next two years, the plan calls for providing 1.2 trillion won to help them slash tuitions by 10 percent on average. It also calls for providing 800 billion won in scholarships to students from lower-income households, officials said.
"If college tuitions remain the same for two years, it would lower the inflation rate by 6 percent" on the assumption that the annual inflation rate is 3 percent, said GNP legislator Lim Hae-kyu, who is in charge of the party's task-force team. "Only those universities that freeze tuitions can receive budget support aimed at slashing tuitions."
The party plans to make a formal announcement on the plan later Thursday, officials said.
The presidential office Cheong Wa Dae showed a negative reaction, saying that the party should have waited to see how Lee's planned meeting with opposition leader Sohn Hak-kyu went on the issue. Lee and Sohn, leader of the main opposition Democratic Party, are set to hold talks on Monday to discuss a range of issues facing the country.
"The meaning of the talks lies in the ruling and opposition parties and the government working together to produce good solutions. I think (the ruling party) should have taken the position of the opposition party and its leader into consideration," a presidential aide said.
For next year's budget plan to take effect, it has to pass through the National Assembly's full session, which is set to begin in August.
In South Korea, 80 percent of higher education institutions are operated by private foundations that rely heavily on tuition fees for revenue.