Park Hong-keun Urges Education Grant Reform, Choi Kyo-jin Defends 20.79% Rate

Park Hong-keun, minister of the Ministry of Planning and Budget, and Choi Kyo-jin, minister of education, clashed head-on over reforming the local education grant at the first public debate held at President Lee Jae-myung's proposal. The Planning and Budget Ministry argued that the internal tax linkage system must be adjusted to reflect the declining school-age population and to enable stable forecasting of education grant revenues. The Ministry of Education countered that the current linkage rate should be maintained while surplus funds are used for higher education and early childhood education, and the two sides failed to find common ground.

The Planning and Budget Ministry and the Ministry of Education held a public debate on Monday titled "Opening a New Course for Education Finance: Reforming the Education Grant for Future Generations," discussing the current structure that automatically allocates 20.79% of internal taxes to the education grant. The debate was arranged after President Lee Jae-myung proposed public debate among ministries at a Cabinet meeting last month.

Minister Park said that day, "Finances belong to the people and must be used most efficiently," arguing that the current internal tax linkage system needs improvement because it causes grants to fluctuate greatly according to changes in tax revenue. In fact, large additional grants were paid in 2021-2022 when tax revenues were strong, but subsequent revenue declines sharply reduced grants in 2023-2024, causing confusion in the education field.

Park went on to say, "This is not about reducing the education grant," stressing, "We will continuously expand the total grant amount and per-student support to respond to future education demand." Park proposed reform principles including: continuous expansion of the total grant and per-student support; securing fiscal stability against tax revenue fluctuations; reinvesting secured funds in education blind spots such as early childhood, higher, and lifelong education; and reflecting the declining school-age population in the fund allocation criteria.

By contrast, Minister of Education Choi Kyo-jin pushed back, saying, "We should not approach this with an economic logic that says the budget should be cut because the number of students has decreased," and "The 20.79% internal tax linkage rate, which is a safety net for education investment, must be maintained." Choi presented a compromise to expand the scope of use, however, saying, "If funds exceeding 20.79% arise, we can fully discuss ways to use them across education, including higher education, early childhood education, and lifelong education." Jeong Keun-sik, superintendent of the Seoul Metropolitan Office of Education, also backed the education ministry's position, saying, "Just as defense spending is not cut because troop numbers decline, it is not desirable to reduce the education grant solely because of the declining school-age population."

Experts' opinions were also sharply divided. Kim Hak-su, senior research fellow at the Korea Development Institute (KDI), argued, "In a situation where the number of students is plummeting, a structure that automatically allocates 20.79% of internal taxes does not fit the changing times," adding, "The scale of the grant must also be redesigned based on actual education demand." By contrast, Lee Sun-woo, head of the Future Education Research Division at the Korean Educational Development Institute, countered, "A decline in the number of students does not mean a decline in education demand," saying, "Schools' roles are in fact growing due to the expansion of care, welfare, multicultural, and special education."

Experts also stressed the need to expand investment in out-of-school youth and higher, early childhood, and lifelong education. Yoo Jae-jun, a professor at Seoul National University, said, "Higher education is suffering from serious fiscal malnutrition," and proposed enacting a higher education finance grant law that would mandate allocating a certain percentage of internal taxes to universities. Hwang Ok-kyung, head of the Korea Institute of Child Care and Education, stressed, "To complete the government's integration of childcare and education, the scope of local education grant support must be expanded to include early childhood education to enhance educational equity."