South Korea’s private education sector rakes in profits despite fewer students

4 days ago 44

SEOUL - South Korea’s school-age population is in free fall, but the country’s private education industry - dominated by after-school cram academies known as “hagwon” - continues to rake in record revenue and profits.

The paradox boils down to two factors: parents spending more per child and a surge in students taking the college entrance exam multiple times to secure spots at top universities and medical schools. As a result, hagwon are shifting their business strategies, focusing on premium, high-intensity programmes rather than student numbers.

Fewer students, bigger budgets

The numbers tell the story. Between 2020 and 2023, the school-age population shrank by 14.5 per cent. In 2024, it fell to 5.02 million, and it is projected to plummet to 3.83 million by 2031, with elementary schools seeing the sharpest drop.

Total private education spending, however, posted a 40 per cent jump during the 2020-2023 period, reaching 27 trillion won (S$25.2 billion) in 2023, according to Statistics Korea.

The per-student average for private education costs skyrocketed 43.7 per cent in the same period --from 302,000 won per month in 2020 to 434,000 won in 2023.

And that is a conservative estimate. A separate 2024 survey by the civic group No Worry About Private Education found that parents who actively use private education services spend an average of 1.061 million won per month.

Yet private academies are thriving, posting record revenues as they charge higher fees for intensive, specialised programmes.

MegaStudyEdu, the country’s largest private education company, reported 718.9 billion won in sales and 106.7 billion won in operating profit in Q3 2024 - already 77 per cent of its total 2023 revenue and 84 per cent of its total 2023 profit.

Hiconsy, a rising player in Daechi-dong, Seoul’s infamous hagwon hub, grew its revenue nearly fivefold in five years, from 63.9 billion won in 2018 to 331.2 billion won in 2023. Its operating profit jumped from 7.2 billion won to 26 billion won over the same period.

Creverse, which runs elite language-learning hagwon, is on a steady climb, posting 173 billion won in sales in Q3 2024.

Digital Daesung, known for its boarding cram schools for college exam retakers, saw Q3 sales rise 1.23 percent to 164.2 billion won, maintaining its steady growth trend.

Retaking Suneung is becoming the norm

In South Korea, getting into a top university isn’t just about talent - it is about endurance. More students are retakin...

Read Entire Article