[Editorial] 54 years later, the education grant needs surgery... The reality of 'half the number of elementary, middle, and high school students' must be reflected

South Korea's government is signaling a significant overhaul of its local education funding system, a mechanism that has been in place for 54 years. The current framework automatically allocates 20.79% of national taxes to the education budget, a system that critics argue has become outdated and inefficient.

Finance Minister Park Wan-soo highlighted the need to innovate mandatory spending, including the education budget, which now constitutes over half of the total national expenditure. This reform comes as the number of primary and secondary school students has dropped by approximately one million over the past decade, from 5.96 million to 4.92 million. Despite this demographic shift, the education budget has nearly doubled, rising from about 40 trillion won to 80 trillion won, driven by increased tax revenues.

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We will begin in earnest to innovate mandatory spending, including the reform of the local education and tax grant, which has been considered a sacred cow.

This automatic allocation has led to concerns about wasteful spending by education offices. Examples cited include lavish spending on entrance and graduation ceremonies, and renovations of schools slated for closure. The system also results in significant unused budget allocations annually, with schools reportedly receiving directives to spend remaining funds by year-end.

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Mandatory spending already exceeds half of total expenditure, constraining fiscal capacity.

The current distribution of funds also creates a severe imbalance, with a disproportionate amount directed to primary and secondary education while higher education, early childhood education, and lifelong learning receive minimal investment. This disparity is evident in per-student public education spending, which is 1.7 times the OECD average for K-12 students but only 0.7 times the average for university and graduate students.

Universities, facing a 17-year tuition freeze, struggle with overcrowded classrooms and online lectures for hundreds of students. Low professor salaries hinder talent recruitment, and many researchers are seeking opportunities abroad. This situation poses a risk to South Korea's ambitions in fields like semiconductors, AI, and data centers, as a weakened university system may fail to supply the necessary talent.

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The number of elementary, middle, and high school students has decreased by about 1 million from 5.96 million to 4.92 million over the past decade, but the education grant has nearly doubled from about 40 trillion won to about 80 trillion won.

The original intent of the education funding system in 1972 was to address a severe shortage of schools and teachers for a student population of 10 million. However, with the drastic demographic changes and evolving national strategies, a reallocation of resources is deemed necessary. The government now prioritizes investment in universities to foster future talent crucial for global technological competition.

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The university's per-student public education spending is 0.7 times the OECD average, while elementary, middle, and high school students' spending is 1.7 times the OECD average.