South Korea has agreed in principle to scrap the rule that automatically sends 20.79% of internal tax revenue to local education grants and replace it with a new formula tied more closely to economic growth and the shrinking school-age population. The reform is expected to be announced this month alongside a proposed Future Response Fund that would redirect tax windfalls and potentially savings from the grant overhaul into long-term investment in education, youth, regions and strategic industries such as artificial intelligence and semiconductors. Officials are still negotiating details including the exact grant formula and any minimum guaranteed level, but estimates cited by sources suggest next year's grants could fall to about 80 trillion to 80.3 trillion won from roughly 100 trillion won under the current system, while the Future Response Fund could receive more than 60 trillion won and, under some assumptions, approach 100 trillion won in its first year.