The Ministry of Education and the Ministry of Planning and Budget clashed publicly over whether to overhaul the local education finance grant system in response to a declining school-age population. The Education Ministry argued for maintaining the current statutory grant rate of 20.79%, while the Ministry of Planning and Budget called for reform reflecting the shrinking school-age population and revenue fluctuations.
Choi Kyo-jin, Minister of Education, emphasized maintaining the current local education finance grant system at a public debate titled "Reforming the Education Grant for Future Generations," held Monday at the Government Complex Seoul. "The 20.79% statutory grant rate is a public education safety net agreed upon by society," he said. At the same event, Park Hong-keun, Minister of Planning and Budget, raised the need to reform the system to reflect the declining school-age population and revenue fluctuations. Under the current local education finance grant system, 20.79% of internal taxes is automatically distributed to provincial and metropolitan education offices, and the total is projected to exceed 80 trillion won next year.
"The 20.79% of internal taxes is the strongest legal safety net agreed upon by society to ensure that education is not shaken even amid unpredictable economic swings or political circumstances," Choi said. "The logic that education finance should be cut simply because the number of students has declined is an approach that views education as a mere cost."
He added, "While maintaining the 20.79% rate as the baseline, if funds exceeding the standard arise, we should also consider ways to broaden the scope of use across education as a whole, including higher education, early-childhood education and lifelong education."
Park, on the other hand, argued that the internal tax linkage method is actually undermining the stability of education finance. "In 2021 and 2022, an additional 6.4 trillion won and 11 trillion won in grants were distributed respectively, but in 2023 and 2024, they were reduced by 10.4 trillion won and 4.3 trillion won respectively — the grant fluctuated significantly according to tax revenue," he said. "The declining school-age population now needs to be reflected in the grant calculation standards."
Park said the system should be reformed to reduce revenue volatility while continuing to expand the total grant amount and per-student support, and to reinvest secured funds in early-childhood, higher and lifelong education as well as future talent development. "This is not about cutting the grant, but about protecting primary and secondary education more firmly while injecting new vitality into universities and early-childhood education," he explained.
Experts who took part in the debate were also divided. Kim Hak-soo, senior research fellow at the Korea Development Institute (KDI), called for a reexamination of the revenue-linked method, saying, "We need to examine whether it is appropriate from a national finance standpoint for the grant to automatically expand simply because tax revenue increased, even as the number of students is falling sharply." In contrast, Lee Sun-ho, head of the Future Education Research Division at the Korean Educational Development Institute (KEDI), said, "A decline in the number of students does not necessarily mean a decline in education demand," adding, "We must consider the reality that schools' roles have expanded to include care, welfare, emotional support and special education."
Cho Keun-sik, Superintendent of the Seoul Metropolitan Office of Education, said, "The 20.79% should be maintained stably." He added, "It is true that investment in early-childhood, higher and lifelong education is needed, but it is not desirable to try to solve this by redistributing existing primary and secondary education finance."
At the event, Yoo Jae-jun, a professor at Seoul National University, proposed enacting a "Higher Education Finance Grant Act" to secure stable university funding. Kang Dae-jung, a professor at Seoul National University, raised the need to expand lifelong education investment, while Hwang Ok-kyung, director of the Korea Institute of Child Care and Education, argued that early-childhood education and care should be included among the recipients of local education finance grant support.
The debate generally produced a consensus on the need to expand national investment in higher, early-childhood and lifelong education. However, the participants ultimately failed to narrow their differences over whether to fund this from the existing local education finance grant. "Today's debate is not an end but a beginning," Choi said. "We will continue to communicate with relevant ministries, provincial and metropolitan education offices and the education field to prepare the most reasonable alternative."
