Signs of the Korean Private Education Market Reaching Its Peak

The Korean Private Education Market for College Entrance Exams Shows Signs of Peaking
Recently, symbolic events in the private education market have raised the possibility that the Korean private education market for college entrance exams may have reached its peak and entered a decline. Notable examples supporting this analysis include the expansion attempt of "Sidae Injae," a prominent academy in Daechi-dong, Gangnam, and the repeated failures to sell the building housing this academy.

Sidae Injae’s Entry into the Law School Admission Market

In December 2024, "Sidae Injae," a leading academy specializing in private education for the college entrance exam (Suneung) in Daechi-dong, Gangnam, ventured into the law school admission market, focusing on the Legal Education Eligibility Test (LEET). This move signals that Sidae Injae has determined further growth in the traditional college entrance market is unlikely. Structural changes, including a declining school-age population and an overheated college admissions competition, have made growth in the existing private education market increasingly difficult.

Sidae Injae’s shift is not merely a business expansion but highlights a paradigm shift in the private education market. Its attempt to move beyond the traditional realm of Suneung preparation into professional school admission reflects the saturation and contraction of the college entrance private education sector. This transition suggests that the Korean private education market has passed its peak and is entering a new phase of transformation.

 

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The Auction Failure of a Key Private Education Building in Daechi-dong
Signs of market change are also becoming evident in Daechi-dong, a symbolic hub of private education for college entrance exams in Gangnam. In 2024, the building housing "Sidae Injae Stone Center," near Eunma Apartment in Daechi-dong, failed to sell after 15 auction attempts. Despite being a high-income property generating approximately 3.4 billion KRW in monthly rent, the appraised value and sale conditions posed an excessive financial burden on potential investors.

This auction failure does not merely reflect a slump in the real estate market. It underscores that even Daechi-dong's private education sector is not immune to structural challenges such as a declining school-age population due to low birth rates and the rising costs of private education. This development highlights the harsh reality that even the traditionally resilient hub of private education cannot escape the broader market contraction.

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The Impact of Low Birth Rates and Declining School-Age Population
The transformation of the private education market is fundamentally driven by demographic factors, specifically the declining school-age population due to low birth rates. This decline directly reduces the demand for private education, signaling growth limitations for private education providers. In the past, high-cost private education markets centered around top-tier school districts experienced steady growth. However, that growth has now stalled, confined by regional and socioeconomic constraints.

The effects of low birth rates are particularly pronounced in college entrance-focused private education. This trend is likely to manifest not only in high-cost markets like Gangnam's Daechi-dong but also in private education markets in smaller cities and rural areas.

The Peak and Future of the Private Education Market

Sidae Injae’s entry into the law school market and the auction failure of a key building in Daechi-dong strongly suggest that the Korean private education market for college entrance exams has already peaked. In the short term, the market may attempt to generate new demand by expanding into areas like law school and professional exam preparation. However, structural challenges such as a declining school-age population and increasing financial burdens will inevitably lead to an overall contraction of the private education market.

As the restructuring of the private education sector becomes unavoidable, the college entrance-focused segment must seek new directions. Strengthening the balance with public education and finding ways to reduce excessive financial burdens will be critical for ensuring the sustainability of the private education market in the future.