December’s declaration of martial law by South Korea’s now arrested and impeached president, Yoon Suk Yeol, saw the country’s currency, the won, plummet to its weakest level against the US dollar since the 2009 global financial crisis.
The dollar had already been steadily increasing against the won over the past decade, with periodic fluctuations. However, December’s turmoil propelled it to its highest point in recent years, surpassing 1,474 won per dollar: a 14 per cent increase on the rate at the same point in 2023. And while new US president Donald Trump’s impact on the global economic system is difficult to predict, South Korea’s political instability and unfavourable economic conditions have led forecasters to suggest that the won is unlikely to recover quickly against the dollar. And that could have significant consequences for international higher education.
South Korea remains one of the biggest contributors to global student mobility, particularly to the US. American universities currently dominate the Korean outbound education market, and, according to the most recent Open Doors report, South Korea ranks among the top three countries of origin for international students in the US, alongside India and China, with 43,149 students enrolled in the 2023-24 academic year. However, the won’s falling value increasingly threatens this market by reducing South Korean households’ purchasing power for goods and services priced in dollars – including higher education.
Recent reports indicate that some Korean students in the US are reconsidering their plans, with some even returning to South Korea. This mirrors the 1997 Asian financial crisis, during which the doubling of the exchange rate forced many Korean students to prematurely end their overseas education.
To contextualise the financial impact of the current exchange rate situation, consider a typical public US university with annual tuition fees of $30,000. At the 1,100 won-per-dollar rate observed four years ago, that amounted to 33 million won. At the current rate of 1,474 won per dollar, the same price now exceeds 44 million won.
Moreover, the total annual cost of US higher education rises, on average, to about $75,000, once room, board and living expenses are taken into account. At the current exchange rate, that amounts to approximately 110 million won: nearly double the annual gross household income in South Korea.
These exorbitant costs are likely to deter middle-income families from pursuing education in the US. Hence, US institutions that are heavily reliant on Korean enrolments must adopt proactive strategies to maintain them. One effective approach involves offering flexible financial arrangements, such as tuition discounts, instalment-based payment plans, or currency-hedging options.
In the absence of such measures, the high dollar may lead to a redirection of Korean student preferences toward more affordable destinations. Countries such as Australia, Canada, the UK and other European nations, which offer comparatively favourable currency conditions, may become more attractive to Korean students, at least in economic terms.
While the weakening won poses challenges for outbound mobility, it simultaneously creates opportunities for South Korea’s domestic institutions to bolster their global competitiveness through greater affordability. They can also position themselves as viable alternatives to overseas education for Korean students, mitigate South Korea’s brain drain by retaining top talent within the country.
Similarly, neighbouring countries with strong academic reputations and cost-effective tuition, such as Japan and Singapore, stand to increase their status as prospective study destinations for Koreans.
The situation also presents a strategic opportunity for the many US transnational education (TNE) campuses operating in South Korea. These institutions enable students to earn globally recognised degrees without incurring the substantial costs of studying abroad. Even with tuition fees denominated in dollars, TNE campuses are able to offer lower-cost education than their parent campuses in the US, primarily due to South Korea’s lower living expenses. By emphasising these financial advantages, these offshore campuses can appeal to a broader spectrum of students, both domestically and from other regions, who are seeking an affordable US-style education.
The interplay between the dollar-won exchange rate and international higher education underscores the broader interconnectedness of global economic systems. And if the effects of the unfavourable exchange rate are compounded by less friendly immigration and higher education policies under the second Trump administration, there really could be a sea change in outbound student flows from South Korea.
For US universities with significant numbers of Korean students, innovation and strategic recalibration may be necessary. But by enhancing affordability, broadening student-market diversification and investing in alternative education models such as online and hybrid programmes, they can mitigate the impact of a decline in the Korean market, sustaining and advancing global student mobility even amid uncertainty.
Kyuseok Kim (KS) is a former Fulbright Scholar and PhD candidate at Korea University, specialising in higher education administration. He has more than 14 years of experience in international higher education, having held positions at both a research university and a US branch campus in South Korea.
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