KRW 106.36 Trillion Confirmed… The Direction of the 2026 Ministry of Education Budget is ‘Balanced Growth, AI, and Higher Education Structural Reform’

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Core Axes are National Balanced Growth, AI Talent Cultivation, and Higher Education Finance Expansion… University Sector Budget Enters the KRW 16 Trillion Era

The Ministry of Education’s budget for the fiscal year 2026 has been finally confirmed at a total of KRW 106.3607 trillion. This marks an increase of approximately KRW 3.7 trillion compared to the previous year’s supplementary budget of KRW 102.6 trillion, with particular attention paid to the fact that the higher education budget has exceeded KRW 16 trillion. Through a plenary session vote, the National Assembly approved a budget that was an increase of KRW 94.5 billion from the government’s proposal. Simultaneously, it reformed the Education Tax distribution structure, establishing a Special Account for Infants and Toddlers (Early Childhood) and extending the Special Account for Higher and Lifelong Education Support for five years.

The Ministry of Education has stated that the budget’s direction is primarily focused on three areas:

1. Strengthening the fostering of universities for balanced regional development.
2. Full-scale implementation of state-responsible AI talent cultivation.
3. Improving the quality of early childhood education and care, centering on the integration of childcare and education (Yubo Tonghap).

Among these, the higher education sector is expected to undergo the most significant changes in both budget and system.

Fostering Universities for National Balanced Growth… “KRW 885.5 Billion for Regional Flagship National Universities, KRW 2.1403 Trillion for RISE”

The largest portion of the 2026 investment in higher education is the strategy to strengthen regional universities. Under the principle of “alleviating the capital-centric structure and supporting balanced growth toward a 5-pole 3-special system,” the government has significantly expanded investment in Regional Flagship National Universities and the RISE (Regional Innovation System & Education) framework.

• Regional Flagship National Universities (RFNU): KRW 885.5 billion is invested, roughly double the previous year’s budget. Financial input will cover the entire education and research system, including innovation in undergraduate education, expansion of cutting-edge equipment, and the creation of regional innovation hubs. Notably, KRW 120 billion has been allocated by newly designating three universities as recipients of the Research-Focused University incentive.
• RISE System: KRW 2.1403 trillion has been allocated. This fully integrates the existing eight sub-projects into RISE, strengthening the local government-led system for nurturing talent linked to local industries and economies. The introduction of new incentives, including a ‘Regional Innovation Hub’ incentive worth KRW 200 billion and a performance-based financial incentive worth KRW 400 billion, is expected to enhance the structural adjustment and specialization effects for regional universities. The previously designated ‘Specialized Regional Universities (Glocal Universities)’ will also continue to receive support.

Structural reform of universities to cope with the declining student population and changes in industrial structure will also be implemented in earnest. The Ministry of Education has allocated KRW 85 billion for university specialization incentives and KRW 34 billion for specialized college (professional university) incentives as new projects for 2026. This method financially incentivizes universities that pursue departmental structure innovation linked to their region and industry, signaling the government’s intention to take a more active role in university restructuring.

AI Talent Cultivation Budget of KRW 125.8 Billion… 40 AI Bootcamps and 10 AI+X Campuses Newly Established

The budget for the state-responsible Artificial Intelligence (AI) talent cultivation project has increased more than sixfold, from KRW 18.9 billion in the previous year to KRW 125.8 billion. Key changes include:

• Expansion of AI Bootcamps (3 campuses $\to$ 40 campuses).
• New establishment of AI+X Convergence Bootcamps (10 campuses).
• New selection of 3 AI Hub Universities (Establishment of AI colleges and fostering regional AI research hubs), with a KRW 30 billion budget.
• Expanded support for the AI sector within the BK21 project.
• New establishment of AI/SW Study Encouragement Loans (up to KRW 2 million per year).

The new KRW 30 billion budget for AI Hub Universities is a measure aligned with the balanced regional growth policy, enabling simultaneous investment in research and education for cultivating high-level AI talent. Overall, the Ministry of Education is strengthening its stance on “securing national competitiveness in the AI era.”

The higher education budget for 2026 is KRW 16.0392 trillion, an increase of approximately KRW 845.1 billion from the previous year. A major structural change is the five-year extension (until 2030) of the Special Account for Higher and Lifelong Education Support. The National Assembly’s decision to reform the Education Tax revenue structure means that the Education Tax imposed on financial and insurance businesses will be directly incorporated into the Special Account. As a result, an additional KRW 1.3 trillion is projected to be secured annually starting in 2027. This is regarded as a turning point in university finance policy, as the higher education budget will effectively have a ‘stable structure based on tax increase.’

KRW 166.8 Billion Added in National Assembly Deliberation… Humanities/Social Sciences, Scholarships, and Facility Investment Also Expanded

Key projects confirmed with an increase from the National Assembly include a KRW 51.4 billion increase for improving the working conditions of childcare staff, a KRW 19.2 billion increase due to raising the unit cost of institutional childcare for children aged 0-2, an expansion of new projects for Humanities and Social Science Research Institutes from 27 to 37 (an additional KRW 1.7 billion), a KRW 20.6 billion increase for customized national scholarships, and a KRW 14.4 billion increase for facility and equipment expansion at national universities. The increase in new projects for the Humanities and Social Sciences basic academic field is expected to partially compensate for the long-standing issue of ‘chronic reduction in humanities and social sciences funding.’ The increase in the customized national scholarship budget is interpreted as a measure to alleviate student burden amidst the prolonged freeze on tuition fees.

Starting in 2026, the Special Account for Early Childhood Education Support will be abolished, and a Special Account for Infants and Toddlers (Early Childhood) will be newly established. 60% of the Education Tax will be transferred as revenue to the new Special Account, which will unilaterally manage early childhood policies such as Yubo Tonghap, free childcare, and improving the teacher-to-child ratio. The Ministry of Education explained that this will “establish a stable support system by integrating the early childhood finances that were separated into the General Account and the Special Account.”

The 2026 Ministry of Education budget is more than just an increase; it represents palpable structural changes. First, the transition to a regional-industry-linked university system is accelerating. Policies centered on regional universities, such as RISE, Regional Innovation Hubs, and Glocal Universities, now have a solid financial foundation, clarifying the shift toward ‘industry-oriented university reorganization.’ The establishment of AI Bootcamps and AI Hub Universities signals an expansion into a ‘nationwide AI re-education system.’ The extension of the Special Account and the restructuring of the Education Tax are key turning points for the structure of university finance, making it highly likely that budget allocation will be increasingly linked to university structural reform and performance. The increase in Humanities and Social Science Research Institute projects, although small, can be seen as a trend toward balanced investment.

Ultimately, the 2026 budget is read as a blueprint that suggests the medium-term direction of higher education policy, centering on three axes: Balanced Growth, Future Talent, and Structural Reform.