South Korea plans overhaul of education grant funding amid demographic decline

South Korea’s Planning and Budget Office has proposed ending the current rule that ties local education grants to 20.79% of domestic tax revenue. Instead, it suggests a formula that reflects economic growth and the size of the school‑age population. The Education Ministry opposes the change, insisting on keeping the existing linkage.

If the present system remains, the next year’s education grant could approach 100 trillion won, while the proposed reform would limit it to about 81 trillion won, saving roughly 20 trillion won and raising the per‑student allocation. Planning Minister Park Hong‑geun said the government will “guarantee the grant at a level close to the long‑term trend line” and use any excess for higher‑education, lifelong‑learning and early‑childhood programs. A formal reform proposal is expected by the end of August, though the two ministries have yet to reach an agreement, raising the possibility of a delayed budget submission.