Finance Ministry proposes ending fixed education grant percentage

South Korea's Ministry of Economy and Finance has formally proposed a significant overhaul of the provincial education grant system, suggesting the abolition of the current mandate to allocate 20.79% of national tax revenue to provincial education offices. The ministry presented a revised bill to the Ministry of Education on June 15, outlining a new calculation method for these grants.

The proposed formula would determine the total grant amount by factoring in the "average nominal growth rate over the past three years" and "40% of the average change in school-age population." This approach marks the first time a specific formula for calculating education grants has been established, clearly signaling the ministry's intent to move away from the fixed percentage of national tax revenue.

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Over the past 20 years, the average annual inflation rate has been 2.3%, while education grants have increased by about 6.5%. We believe it needs restructuring, not just a reduction.

Nominal growth rates would be based on confirmed figures from the Bank of Korea, reflecting inflation, while the school-age population (ages 3 to 17) would be determined by resident registration data compiled by the Ministry of the Interior and Safety at the end of each year. The partial inclusion of the school-age population change aims to mitigate drastic fluctuations in grant amounts.

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The 20.79% framework, which serves as a minimum safety net for educational investment, must be maintained.

This shift from a direct link to national tax revenue to an economic and demographic-based calculation could significantly reduce education funding. With the current year's education grants projected to reach approximately 76.4 trillion won and an estimate of nearly 100 trillion won for the following year due to increased tax revenue from the semiconductor boom, the ministry anticipates its proposed formula could lead to a reduction of at least 10 trillion won.

However, the Ministry of Education maintains its stance on preserving the legal grant rate of 20.79%, proposing instead to expand the scope of how these funds can be utilized. This proposal has already met with strong resistance from educational bodies, including the National Council of Superintendents, which argues that the current system is a vital safeguard for educational autonomy and that reducing funding based on declining student numbers is an oversimplification. A coalition of 21 educational and civic groups plans to hold a joint press conference to demand the withdrawal of the proposed changes.

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Linking it to national taxes is the minimum institutional device that has supported the constitutional value of education, including autonomy. Using the decrease in school-age population as a basis for reducing educational finances is simply judging educational reality with simple arithmetic.