For the last twenty years, extra-curricular activities outside the school have been increasingly flourishing. Especially noteworthy were the neighbourhood cramming classes. Such classes taught, and helped students learn by heart, what had been already taught in regular schools. Although the effectiveness of their redundant teaching was largely doubtful, the intensification of entrance competition drove to such classes a majority of students in virtually all graded schools. In effect, the costs of the classes have been soaring up and persistently aggravating parental financial burdens. The uprising of expenses for the cramming classes quickly became a burning political issue. All governments during the last twenty years implemented policies to reduce the number of cramming classes and parental expenses for such classes but all of them have turned out to be ineffective. This study analyses the causes of the ever-intensifying university entrance competition and identifies the reasons for the failures of those government policies. From this, it moves on to developing a new theory framework for more viable policies. This framework addresses conditions both principal and ancillary to the country's education system. Notable among the latter conditions is the uniformity of state-imposed curriculum and textbooks. Notable among the former ones are the state-imposed annual national entrance examination and the national hierarchy of universities that are firmly entrenched regardless of individual universities' performances. Most of these conditions stem from the “strong state” policies continually in place since General Pak Chong Hi's military coup in 1961. This paper suggests that the question of soaring extra-curricular expenses cannot be solved unless those internal and external conditions are eliminated, and that such conditions cannot be eliminated unless the government boldly liberalizes the education system in all aspects of its organization and operation and, importantly, to empower civil society. Specifically, this study recommends three necessary policy measures: 1) the abolition of the annual national entrance examination, 2) several measures for enhancing flexibility and plasticity in the university hierarchy, and 3) the liberalization of curriculum and textbooks.