Next Year’s Grants for Elementary, Middle, and High Schools... University Education Transfer Funds Increase by 47%

Next Year’s Special Account Transfer Amount 2.2414 Trillion KRW
Education Grants Expected to Decrease by About 6.8 Trillion KRW
Budget Allocation Needed for Reserve Integration Next Year

In next year's budget proposal, the local education finance grants (education grants) for kindergarten, elementary, middle, and high schools are expected to decrease, while transfers to the Higher Education and Lifelong Education Support Special Account (Goteukhwaegye) are projected to increase. This is because, unlike education grants which are linked to domestic taxes, the Goteukhwaegye is allocated from the education tax, which is separate from domestic taxes.

According to analysis data from the Justice Party Policy Committee on the 18th, transfers from the education tax, which is the source of the grants, to the Goteukhwaegye increased by 47%, from 1.5199 trillion won this year to 2.2414 trillion won next year.

The Higher Education and Lifelong Education Support Special Account Act, passed by the National Assembly last year, stipulates that approximately 3.6 trillion won of education tax revenue, which was previously allocated to education grants, will be temporarily supported to the Goteukhwaegye for three years. The main purposes of the Goteukhwaegye are to strengthen universities' education and research capabilities, foster national talent in new technology fields, and enhance universities' lifelong education capabilities. At that time, the political and educational sectors showed sharp differences in opinion regarding university financial difficulties and the lack of funding for kindergarten, elementary, middle, and high schools.

However, it appears that there will be no financial relief for kindergarten, elementary, middle, and high schools next year either. Due to expected tax revenue reductions continuing into next year, education grants linked to domestic taxes are forecasted to decrease. According to the Ministry of Education, the budget for kindergarten, elementary, and secondary education next year is set at 73.7406 trillion won, a reduction of 7.1714 trillion won (8.9%) compared to this year's 80.912 trillion won. In particular, education grants are expected to decrease by 6.8748 trillion won to 68.8859 trillion won compared to this year.

On the 6th, while spring rain was falling, parents and police officers are conducting a school zone traffic safety campaign in front of Eonbuk Elementary School in Gangnam-gu, Seoul. Photo by Jinhyung Kang aymsdream@

On the other hand, since the Goteukhwaegye is transferred from the education tax, which is separate from domestic taxes, it can increase even if education grants decrease. According to current laws, half of the amount from the education tax, excluding the Early Childhood Education Support Special Account (Yuteukhwaegye), is transferred to the university Goteukhwaegye.

Especially next year, the Ministry of Education is preparing to implement the Yubo Integration Plan, and 179.7 billion won will be invested to provide an additional 50,000 won support for early childhood tuition and childcare fees. Song Kyung-won, a policy committee member of the Justice Party, said, "We can consider sharing the burden on education offices by increasing the Yuteukhwaegye in the National Assembly."

There is also a forecast that the amount of education grants that each city and provincial education office can use will be less than the actual budgeted amount due to the decrease in tax revenue. According to the '2023 Ordinary Grants Budget and Budget Deficit' submitted by the Ministry of Education to Seo Dong-yong of the Democratic Party, a member of the National Assembly Education Committee, on the 16th, the actual amount of grants is expected to decrease by 10.5544 trillion won compared to the budgeted amount due to this year's tax revenue shortfall. The deficit rate, which is the expected decrease in education grants compared to the budgeted amount, is 14.35%.

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