The government plans to overhaul local education finance grants, ending the automatic allocation of 20.79% of total internal tax revenue under a formula introduced in 1972. The plan, unveiled on Aug. 21, 2026, by the Ministry of Planning and Budget and the Ministry of Education, would base grants on the average annual nominal growth rate over the previous three years and changes in the school-age population, with only 35% of the population-change rate applied because about 60% of spending covers fixed costs such as teacher and staff salaries. Next year's grant, previously estimated at up to 100 trillion won, is projected at about 79 trillion won to 80 trillion won, freeing roughly 20 trillion won for an education and talent account within a future-response fund. The account would support early childhood, higher and lifelong education and cover any shortfall if the new formula produces less funding than the previous year. The government says primary and secondary education funding will remain stable, but 363 education and civic groups, the Korean Council of Education Superintendents and academics criticized the plan, warning that demand for investment in areas such as artificial intelligence education and tailored welfare is rising even as student numbers decline. An emergency action group also protested outside the Central Government Complex in Seoul's Jongno District. Ministers Park Hong-keun and Choi Kyo-jin attended the joint briefing after the first Fiscal Management Strategy Council meeting and had reportedly differed over the changes.