Abolish the 55-year-old tax-linked education funding system and make higher education a turning point

South Korea is set to dismantle its 55-year-old system that automatically allocates a portion of national tax revenue to local education offices. Starting next year, the funding formula will shift from a fixed percentage of national taxes to a more dynamic model considering economic growth and changes in the school-age population.

Under the current system, local education offices were set to receive approximately 100 trillion won next year. However, the proposed reform could reduce this amount to 80 trillion won. The government is considering using the 20 trillion won difference to establish a new 'talent and education account' within a future preparedness fund.

This reform comes as the number of elementary, middle, and high school students in South Korea has fallen below 5 million for the first time. Despite this demographic shift, education funding has more than tripled over the past two decades. Critics argue that this automatic increase, tied to tax revenue, has led to financial neglect of early childhood education, universities, and lifelong learning programs, while per-student spending in K-12 education far exceeds the OECD average.

Historically, the link between national taxes and education funding was established during the industrialization era to prioritize workforce development through compulsory primary and secondary education. Now, with a focus on global technological competition, the government emphasizes the need to cultivate talent in advanced fields, which hinges on strengthening universities. However, many universities are struggling financially and lack the resources for essential investments, such as AI transformation, with over half of surveyed institutions unable to plan such initiatives.

Despite the clear need to reallocate resources, local education superintendents and the K-12 education sector are reportedly resisting the change, insisting on maintaining the current system. The editorial argues that in a nation where human talent is a key resource, concentrating investment solely on K-12 education is illogical. It calls for breaking down the rigid funding structures to ensure equitable investment across all life stages, including early childhood, higher education, and lifelong learning.