A couple of years ago I asked a friend in Korea with a single child if he considered having more kids. He told me that he wanted to give the best for his son, and he couldn’t really afford the education cost of a second child. He told me a his son was taking 3 classes outside school and that it cost him about 1/3 of his then salary.
Like many countries, the Korean education system is biased towards create elite member of its society. This has been historically true. In ancient Korea, there was the state examination called Gwageo (??). Its purpose was to select officials for government office and shortest route to achieving aristocratic status. In modern Korea, many still think that the purpose of the educational systems is to generate an educated elite of administrators for the high public office through Goshi (??) examinations and university professors. This is really not surprising given that it is these administrators and professors who create education policy and systems.
One is lead to ask, what should the purpose of public education be? To send kids to a good college? To land a high paying job? To marry into a good family? Then perpetuate this cycle? It does seem like the purpose of education is a self-serving cycle without real social benefits or meaning but to advance economic gain and social tenure for the few and the elite.
Sir Ken Robinson, in his address at TED 2006, puts it more elegantly:
Education is supposed to take us into the future we can’t grasp… If you were to visit education as an alien and ask, what is public education for, you would have to conclude if you look at the output, the purpose of public education is to produce university professors. The whole system of public education around the world is a protracted process of university entrance. And the consequence is that many highly talented, brilliant and creative individuals think they are not.
This situation in Korea is compounded by the fact that the education-crazed population is not satisfied with public education alone and takes matters into its own hands, investing an absurd amount of time and money is Sa-kyo-yuk (???) or “private education” which consists of carting kids off to Hakwon (??) or educational institutions to get that extra one-up on English, math, Taekwondo, arts or public speaking.
It seems that only the affluent or the crazy could afford to keep up this kind of frenzy. And so many do.
In this kind of climate, schools serve only to invest in those who excel. They have limited resources, demanding parents and an evaluation system that only looks at the grades as it measure of success. Malcolm Gladwell in his latest book Outliers call this phenomenon, the Matthew Effect, coined by sociologist Robert Merton who eluded to the verse in the Bible, Matthew 25:29: “For unto everyone that hath shall be given, and he shall have abundance. But from him that hath not shall be taken away even that which he hath.”
It is those who are successful, in other words, who are most likely to be given all kinds of special opportunities that lead to further success.
He goes on to point out that in fact kids from poor families work as well as students from affluent families during the academic year, however they start to fall back as a result of laying fallow during the long summer breaks, when rich kids go to camps or received any additional mind-stimulating education.
The Cycle of Poverty2
So what about the rest that do not fall into the academic elite? What about those below average? What about those who do not have the economic means to have that extra education?
The poor remain poor because they are not given the opportunity to generate the escape velocity to break away from the gravity of poverty. It takes extraordinary effort for the poor. Muhammad Yunus, the founder of the Grameen Bank and recipient of the Nobel Peace Prize in 2006 talks to length about this in his book, Creating a World without Poverty
In Malcolm Gladwell’s book, the poor are a victim of circumstance. In Korea this is more true, given the climate of extra education and the breakneck pace of classes and subjects that are covered. Teachers simply do not have the time for those kids who fall behind. They are also not given any incentive to bring those below average kids up, since they are evaluated on how many kids do well in exams.
So what to do? Where to break this cycle of poverty in education? How do we give poor kids a fair shot at escaping poverty? This seems to be a two-part problem:
1. From the beginning and all the way through public education, provide poor kids some of the guidance, attention and extra-education that their more affluent classmates get;
2. Once they have made it through the public education system, provide them with an opportunity to attend college.
On the public education side, there commendable efforts such as We Start, a program run by Joongang Ilbo, one of the major daily newspapers in Korea, which provide after-school programs for poor kids. It seeks to provide a community-based educational, health and mentoring support for underprivileged kids. But the program only has a limited reach and it stops when the kids graduate primary school (1-6 grade).
I am sure there are the foundations and non-profits working to help the poor students through public education. But all have the limitations in funding so their enterprise have limited reach and scalability.
Another issue is the availability of teachers for the kids. These non-profits mostly rely on volunteer teachers to help poor kids, and here again is a limited supply.
On the college side, if they are lucky they gain access to various scholarships offered by the government, colleges, foundations and religious organizations. But these are not easy to come by, not centrally or systematically organized, and too few.
For those who do not get a scholarship there are for-profit educational loan institutions. Most of them provide inflexible 6 month to 5 year loans. These obviously serve to profit from their enterprise and do not cater to special the needs of the poor students. I am sure they would prefer to provide loans to middle/upper class students who can pay back their loans on time.
An Integrated Approach
It would seem that the issues mentioned above can be approached an integrated (and possibly financially sustainable) way:
1. Offer “patient” loans to college students from poor families.
2. Allow these students to pay back some of their loan by working as teacher for the kids in public education.
3. Make poor families pay a small amount to commit their kids to this extra education help.
These principles can be the basis of establishing a social business, which could be scalable and replicable.
Loans Instead of Scholarships3
For poor college students, loans and not scholarships are good for many reasons:
It is not a free lunch. It gives kids who have lived most of their lives on a survival instinct to make most of their instinct to find a creative ways to pay back their loans, either during the school year or after they graduate. The whole giving them the fishing rod and not the fish thing.
It creates a sustainable model. Funds are replenished as students graduate and pay back their loans. These funds will be available to the next student.
It encourages independence. They studied hard and overcame odds to get this far. It reinforces their self-confidence. Handouts breed dependence.
The loans are must be targeted and only be offered to those who mean a certain poverty criteria. Yunus is careful to point out that social businesses should not benefit the non-poor. Loan recipients should consistently be engaged and loan conditions and terms adjusted to meet the needs of each student. If they have an opportunity to pay it off quickly, then they should be encouraged to do so. If they fall behind, then the loan should be restructured. Defaulting is not an option. Repayment plans should be strucutred so that they only start paying once they are employed and for a couple of year, no interest is applied.
Korean college education is still relatively cheap compared to US schools. A quick back-of-the-napkin calculation shows that the recent graduate with an average paying job out of college dedicates 10% of his/her salary to repayment, they should be able to complete payment in about 8 years.4
The loan recipients should be offered the employment during the school year or during summer and winter breaks to repay part of their loans through mentoring of disadvantaged kids in poor neighborhoods. Ideally they would return to their own neighborhoods and communities. Here a matching grant from foundations or corporate sponsorship maybe be helpful.
Students in upper years can also be offered jobs administering the loan program, mentoring students new to the system so that the program has a strong community aspect.
Many religious groups and local communities offer and maintain scholarships for disadvantaged kids within their communities. These group could “bank” their funds in the loan and offer it to their students. A loan rather than a scholarship gives both the group/community and students a reason for them to stay engaged. You can walk away with a scholarship, but you are tied to a loan. The group/community should provide as many additional opportunities for the students to repay their loans through community service and mentoring to kids who are in similar situations as they were just a couple of years ago.
The “Patient” Loan Institution
A “patient” loan institution of this sort does not currently exist, but it would have many benefits:
- Better reach
- Efficient management / economies of scale
- Effectiveness of loan process
- Stability and patient capital
- Success metrics tracking and improvement in products and services over time
- Institutional knowledge
- Credibility through branding
- Accommodation of individual donors and institutional donors
Obviously these are just untested thoughts at this point. There are many foreseeable challenges:
- Will this model be a sustainable social business?
- Should this business be a non-profit or a for-profit enterprise?
- Can a loan institution of this kind be created? What is the legal framework that it needs to operate under?
- What would be the governance structure for an business of this kind?
- How to initially fund this social business?
- How to form meaningful partnerships with schools, universities, foundations, non-profits and religious groups to support this effort?
I also believe strongly that if this model is indeed sustainable, scaleable and (socially and economically) profitable that special provision for special education students who can volunteer/help kids with disabilities. These kids are one of the most stigmatized, abused and neglected in Korean society. If the measure of a mature society is how well it takes care of those who cannot take care of themselves, Korea ranks pretty low, looking at the way it look upon and treats it disabled.
Similar to my proposal, there was an article in the New York Times Im Going to Harvard. Will You Sponsor Me?, about UniThrive.org which provides a service where alumni can give a loan to students in financial need. As of writing the service is only limited to Harvard students and alumni with plans for other schools. It also not limited to students from poor families. It’s the idea of providing interest free loans to students is worth comparing. The loans are limited to $2,000 and are interest free, and repaid within 5 year after graduation. The article also mentions that kiva.org a crowd-sourced microfinance site will soon be offering loans in the U.S., planning eventually to expand to student loans.
1. This post came from the result of many conversations with my father who is a volunteer English teacher for the We Start program. Two books I read recently further shaped my thinking:
- Muhammad Yunus, Creating a world without poverty: Social Business and the Future of Capitalism
- Malcolm Gladwell, Outliers: The Story of Success
I am pretty sure that many people (smarter than I) have already though of this idea and have developed much further than what I write here. If so I’d love to hear about their work.
2. There are many ways to break the cycle of poverty. Microfinance has been proven to be a very powerful one. I believe upward mobility through education is another.
3. I have to say that by knowledge of banking, student loans, scholarships etc. are very limited. None of these ideas have been tested in any way. God is in the details. The challenge is working out the details, refining the ideas and testing them.
4. The assumptions for this calculation are: 5 million won / year for tuition, 20 million won salary with 10% increase per year based on the following information sources: