# South Korean education grant and exam reform debate

> Live situation record from CLSTR: https://clstr.news/situations/south-korean-education-grant-reform-debate
> Updated: 2026-08-16T22:00:00.000Z. Sources: 13. Developments: 2.

South Korea is debating a major overhaul of its local education grant system to address demographic decline. The Planning and Budget Office initially proposed replacing the current rule, which ties grants to 20.79% of domestic tax revenue, with a formula based on economic growth and the size of the school-age population. This change could potentially reduce the grant from approximately 100 trillion won to 81 trillion won.

While the Ministry of Economy and Finance and the Ministry of Education reached a preliminary agreement to abolish the automatic tax linkage, negotiations have since stalled. Disagreements persist regarding the minimum guaranteed funding levels and the specific use of funds. The Ministry of Education seeks legal mandates to maintain funding comparable to the current system, while the Ministry of Economy and Finance argues such mandates would create a new automatic linkage. Additionally, disputes remain over whether semiconductor-related tax revenues should be used for higher education, lifelong learning, and early childhood programs, or if primary and secondary education must remain the priority.

In a recent development, the scope of educational reform has expanded to include university entrance examinations. The National Education Commission and the Ministry of Education have announced plans to introduce descriptive and essay-type questions to the College Scholastic Ability Test (CSAT) and transition to an absolute evaluation grading system. A formal announcement regarding these long-term exam reforms is expected in March of next year following public deliberation. Meanwhile, the funding debate continues, with the Ministry of Economy and Finance aiming to redirect funds toward strategic investments while the Ministry of Education advocates for protecting primary and secondary education funding. Final decisions are expected to face scrutiny in the National Assembly as budget proposal deadlines approach.

## Claims

- President Lee Jae-myung called for accelerating the nuclear submarine project. (corroborated by 6 sources)
- President Lee Jae-myung called for political cooperation across different factions to focus on national interests. (corroborated by 5 sources)
- The Ulchi exercise is a defensive measure and does not intend to increase tensions or attack North Korea. (corroborated by 5 sources)
- President Lee Jae-myung ordered the transfer of wartime operational control to be completed within his term. (corroborated by 4 sources)
- The President ordered the steady preparation for the establishment of the Korea Military Academy. (corroborated by 4 sources)
- South Korea is currently ranked as the 5th strongest military power in the world. (corroborated by 3 sources)
- The government plans to abolish the system of automatically allocating 20.79% of local taxes to the local education grant. (single source)
- The new system will determine the education grant size based on the average economic growth rate and school-age population changes over the last three years. (single source)
- The Ministry of Education is demanding a legal guarantee for a minimum level of education funding to replace the current tax-linked system. (single source)

## Timeline

### 2026-08-16: South Korea's President Lee pushes for OPCON transfer and nuclear submarines

South Korean President Lee Jae-myung reaffirmed plans to regain wartime operational control within his term and called for accelerated development of nuclear-powered submarines to bolster national defense.

12 sources. https://clstr.news/cluster/south-korean-government-debates-reform-of-local-education-grant-system

### 2026-07-19: South Korea plans overhaul of education grant funding amid demographic decline

South Korea’s Planning Office seeks to replace the 20.79% tax‑linked education grant formula with one based on economic growth and student numbers; the Education Ministry resists, leaving a potential 100 trn‑w​

2 sources. https://clstr.news/cluster/south-korea-plans-overhaul-of-education-grant-funding-amid-demographic-decline

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Cite as: South Korean education grant and exam reform debate. CLSTR, https://clstr.news/situations/south-korean-education-grant-reform-debate