The number of universities participating in National Scholarship Type II has plunged to about one-quarter in the past four years. As beneficiaries have also tilted from low-income to high-income groups, critics say the program's original purpose has effectively been distorted. In political circles, there is growing calls to abolish Type II and shift to a scholarship system centered on living and work support.
According to data submitted by People Power Party lawmaker Cho Jung-hoon (National Assembly Education Committee) from the Ministry of Education on the 25th, the number of universities participating in Type II fell from 275 in both 2020 and 2021 to 260 in 2022, 247 in 2023, and 233 in 2024. As of the end of August this year, only 72 remained. In just four years, participating universities plunged by 73.8%. Cho's office analyzed, "National and public universities, which must cooperate with government policy, stayed, while many private universities, which raised tuition amid financial difficulties, dropped out."
The distribution of beneficiaries by income bracket has flipped. As recently as 2021, the share of middle- and low-income students (brackets 1–4), including basic livelihood and near-poverty recipients, was 48.4%, but in the first semester of this year it fell to 15.6%. By contrast, high-income beneficiaries (brackets 9–10) accounted for only 0.9% in 2020, but this year they made up more than half (50.6%). Since last year, with full tuition for basic livelihood and near-poverty students covered by Type I, Type II has relatively concentrated on high-income groups, the lawmaker's office said.
Type II provides earmarked tax to universities that participate in freezing or lowering tuition, and universities set their own criteria to support students. It was intended to induce tuition freezes, but as the sharp drop in participating universities and the high-income skew have become clear, criticism has emerged that "the program has run its course."
The government plans to expand National Scholarships going forward. From the second semester of this year, it increased the support amount for brackets 1–8 by 100,000–400,000 won. In line with the trend of expanding the National Scholarship budget, there are calls to shift the National Scholarship system to living and work support.
Cho said, "Controlling tuition through National Scholarships has now reached its limit," adding, "If we restructure around four pillars—stability of living expenses (living), work experience (work), performance incentives, and fair repayment—we can achieve both just redistribution and investment in human capital."
In the short term, Cho proposed as alternatives: ▲ creating and expanding living scholarships for low-income students ▲ expanding quality work-study jobs. In the mid to long term, he emphasized the need to expand performance-based scholarships linked to research, grades, startups, and local contributions; extend the interest-free period for student loans; and introduce a principal reduction system for national service activities.
Cho urged the Ministry of Education to "submit the results of a policy evaluation of Type II scholarships by the time the National Assembly reviews the 2026 budget, and immediately embark on improving the National Scholarship system."