SEOUL – South Koreans’ spending on private education hit another record high, driven partly by a frenzy for medical school admission, further straining household finances that are already a key factor behind the nation’s low fertility rate.

South Koreans spent 27.1 trillion won (S$27.4 billion) on private education in 2023, a 4.5 per cent rise from 2022, data released by the national statistics office showed on March 14.

Each student on average spent 553,000 won a month in 2023, with the cost increasing in line with age progression.

In particular, high school students attending private educational institutions spent 740,000 won per month, the stats showed.

The lion’s share of the spending went to so-called hagwons, privately-run institutes that help students gain an edge preparing for exams.

Admission into medical schools is the most sought-after by students at the apex of scholastic performance, and experts say this frenzy may be threatening to undermine other industries such as semiconductors.

Rising hagwon costs have coincided with falling fertility rates as potential parents weigh the financial burden that comes from raising a child.

South Korea again set a record for the world’s lowest fertility rate in 2023, with the number of babies expected per woman in a lifetime falling to 0.72 from 0.78 in 2022. BLOOMBERG