The government has significantly expanded the 2027 budget, aiming for potential growth and regional balance. This includes the establishment of a 'Future Response Fund' based on increased tax revenue from the semiconductor boom, with substantial investments in education, youth, and talent development. However, concerns are rising over hasty project restructuring, arbitrary budget estimates, and the risk of overlapping investments. This report by Aju Economy examines the structural issues of the 2027 budget prepared by the Ministry of Education and the effectiveness of key projects funded by the new Future Response Fund, based on the National Assembly Budget Office's report and expert opinions.
5.26 trillion won allocated for improving teacher-to-child ratios; loopholes in public daycare support
To enhance the quality of care for infants aged 0-1, the Future Response Fund has allocated 5.269 trillion won for a 'teacher-to-child ratio improvement' initiative. This includes 1.238 trillion won for personnel support, 3.960 trillion won for childcare fees, and 70 billion won for public daycare incentives.
However, as of July 2026, only 35.5% of public daycare centers participated in improving the teacher-to-child ratio (from 1:3 to 1:2), significantly lower than private (52.1%) and home-based (74.1%) care. Public daycare centers receive only 80% of the funding for additional teacher salaries from the government, leaving them to cover the remaining 20% and operational costs for additional classes. Although the government has introduced new incentives for public daycare centers (200,000 won per month for 0-year-olds and 100,000 won for 1-year-olds), critics argue that this is insufficient to cover actual costs.
Moreover, for 1-year-olds (from 1:5 to 1:4), the support for improving ratios from the Future Response Fund will run concurrently with existing incentives for maintaining infant classes (444.85 billion won), raising concerns about overlapping support for the same classes. For instance, a class with four children could meet the criteria for both programs, highlighting the need for clearer management of support standards and long-term rationalization of the system.
However, as of July 2026, only 35.5% of public daycare centers participated in improving the teacher-to-child ratio (from 1:3 to 1:2), significantly lower than private (52.1%) and home-based (74.1%) care. Public daycare centers receive only 80% of the funding for additional teacher salaries from the government, leaving them to cover the remaining 20% and operational costs for additional classes. Although the government has introduced new incentives for public daycare centers (200,000 won per month for 0-year-olds and 100,000 won for 1-year-olds), critics argue that this is insufficient to cover actual costs.
Moreover, for 1-year-olds (from 1:5 to 1:4), the support for improving ratios from the Future Response Fund will run concurrently with existing incentives for maintaining infant classes (444.85 billion won), raising concerns about overlapping support for the same classes. For instance, a class with four children could meet the criteria for both programs, highlighting the need for clearer management of support standards and long-term rationalization of the system.
199.6 billion won for university AI joint subscription; concerns over dependency on foreign tech giants
The 'University Student AI Joint Subscription Support' program, which provides premium AI services to university students, has faced criticism for its rushed planning. Critics argue that large-scale contracts funded by the government could deepen dependency on specific foreign tech platforms, contradicting domestic AI competitiveness initiatives like the 'Everyone's AI' project by the Ministry of Science and ICT.
The demand estimation process has also been deemed inadequate. The Ministry of Education based its projections on a simple 30% ratio of STEM students and applied a 60% usage rate derived from a single university's staff and student usage rate (55.5%). This approach overlooks the demand for advanced AI in humanities and social sciences and basic needs within STEM fields.
Furthermore, while the Ministry claims that the joint subscription can reduce individual subscription costs from 1.88 million won to around 80,000 or 90,000 won (at 87,777 won per unit), this is misleading as it involves multiple students sharing the same service, creating a statistical illusion rather than providing a genuinely cheaper option. The limits on individual usage and the fulfillment of educational and research purposes have not been verified, according to the National Assembly Budget Office.
The demand estimation process has also been deemed inadequate. The Ministry of Education based its projections on a simple 30% ratio of STEM students and applied a 60% usage rate derived from a single university's staff and student usage rate (55.5%). This approach overlooks the demand for advanced AI in humanities and social sciences and basic needs within STEM fields.
Furthermore, while the Ministry claims that the joint subscription can reduce individual subscription costs from 1.88 million won to around 80,000 or 90,000 won (at 87,777 won per unit), this is misleading as it involves multiple students sharing the same service, creating a statistical illusion rather than providing a genuinely cheaper option. The limits on individual usage and the fulfillment of educational and research purposes have not been verified, according to the National Assembly Budget Office.
4.65 trillion won for 'First Career Project' for university students; unrealistic target of 60,000 participants
The 'First Career Project' aims to support students participating in internships with monthly stipends (1.15 million won for five months), totaling 4.65 trillion won. This budget is based on the assumption that 60,000 students will participate for an average of five months. However, as of 2025, only 31,518 students completed internships, with both participation and internship providers declining over the past four years. Given this context, the target of 60,000 represents a 1.9-fold increase over existing figures, making it highly unlikely to be achieved in the first year of the new program.
The duration of the internships is also unrealistic. In 2025, 65.9% of all internship participants completed less than 12 weeks (about three months). Assuming an average of five months would significantly disrupt students' academic schedules, including course completion and graduation requirements. There is a risk that to meet the target, internship providers may resort to assigning students to simple, repetitive tasks or using them as substitutes for existing workers, leading to potential human rights violations and safety incidents.
Additionally, despite the existence of a standard internship system operated through partnerships between businesses and universities, the Ministry of Education's push to incorporate this into a large-scale national project has been criticized for undermining existing job training programs. A planning director from a university in the metropolitan area stated, "Universities are already managing standard internships in collaboration with businesses, yet the Ministry has hastily introduced internship support without detailed coordination, leading to conflicts with existing regulations and overlapping with other departments' programs, such as the Ministry of Employment and Labor's youth experience support initiatives."
The duration of the internships is also unrealistic. In 2025, 65.9% of all internship participants completed less than 12 weeks (about three months). Assuming an average of five months would significantly disrupt students' academic schedules, including course completion and graduation requirements. There is a risk that to meet the target, internship providers may resort to assigning students to simple, repetitive tasks or using them as substitutes for existing workers, leading to potential human rights violations and safety incidents.
Additionally, despite the existence of a standard internship system operated through partnerships between businesses and universities, the Ministry of Education's push to incorporate this into a large-scale national project has been criticized for undermining existing job training programs. A planning director from a university in the metropolitan area stated, "Universities are already managing standard internships in collaboration with businesses, yet the Ministry has hastily introduced internship support without detailed coordination, leading to conflicts with existing regulations and overlapping with other departments' programs, such as the Ministry of Employment and Labor's youth experience support initiatives."
2.13 trillion won for 'Regional National University Scholarships'; tuition-free for high-income bracket 10
The newly established 'Full Scholarship for Regional National Universities' program (2.1315 trillion won) will cover the full tuition for new students at 30 national universities outside the metropolitan area, increasing the regional balance scholarship budget to 3.28015 trillion won, more than quadrupling it. If expanded to all grades starting from the 2027 academic year, the annual financial burden could reach approximately 7.516 trillion won, yet the Ministry of Education has not included this in its medium-term financial plan.
Notably, students from high-income bracket 10, with monthly household incomes exceeding 1.948 million won, will also receive full tuition waivers, raising questions about whether this will effectively incentivize them to settle in regional areas. In contrast, support for private universities in the region (regional talent scholarships, 115 billion won) is strictly limited to a select group of outstanding students. In the 2027 college admissions results, applicants to regional national universities increased compared to the previous year (5.2% for regional base national universities and 12.6% for general regional national universities), while private universities saw only a 0.5% increase.
A planning director from University A remarked, "Despite the government's optimistic claims about attracting metropolitan talent to the regions, in reality, regional national universities are absorbing students who would have enrolled in private universities, resulting in a zero-sum game within the region. By imposing strict regulations on private universities, which accommodate over 80% of domestic students, while offering full tuition waivers to national university students, this constitutes clear discrimination against private institutions and poses a risk of undermining regional private universities."
Notably, students from high-income bracket 10, with monthly household incomes exceeding 1.948 million won, will also receive full tuition waivers, raising questions about whether this will effectively incentivize them to settle in regional areas. In contrast, support for private universities in the region (regional talent scholarships, 115 billion won) is strictly limited to a select group of outstanding students. In the 2027 college admissions results, applicants to regional national universities increased compared to the previous year (5.2% for regional base national universities and 12.6% for general regional national universities), while private universities saw only a 0.5% increase.
A planning director from University A remarked, "Despite the government's optimistic claims about attracting metropolitan talent to the regions, in reality, regional national universities are absorbing students who would have enrolled in private universities, resulting in a zero-sum game within the region. By imposing strict regulations on private universities, which accommodate over 80% of domestic students, while offering full tuition waivers to national university students, this constitutes clear discrimination against private institutions and poses a risk of undermining regional private universities."
6.91 trillion won for 'Future Talent Growth Fund'; lack of legal basis for comprehensive grants
The 'Future Talent Growth Fund' (6.91 trillion won) has been established to provide block funding to 21 national universities outside the metropolitan area, allowing them to execute their long-term development plans autonomously. This massive initiative allocates an average of 500 billion won to nine regional national universities and 200 billion won to twelve general regional national universities.
However, to accumulate these funds over multiple years for university endowments, amendments to the 'National University Accounting and Financial Management Act' are necessary, yet no related proposals have even been submitted to the National Assembly.
Budgeting without a legal foundation and the absence of annual investment plans beyond the first year raise concerns. If funds are allowed to accumulate indefinitely under the guise of autonomy, it could lead to a moral hazard where substantial public funds remain unutilized for urgent educational and research innovations.
However, to accumulate these funds over multiple years for university endowments, amendments to the 'National University Accounting and Financial Management Act' are necessary, yet no related proposals have even been submitted to the National Assembly.
Budgeting without a legal foundation and the absence of annual investment plans beyond the first year raise concerns. If funds are allowed to accumulate indefinitely under the guise of autonomy, it could lead to a moral hazard where substantial public funds remain unutilized for urgent educational and research innovations.
6 trillion won for private university STEM infrastructure; concerns over overlapping investments
Approximately 6 trillion won will be allocated for the 'Infrastructure Support for Private University STEM Facilities,' providing around 15 billion won to over 40 regional private universities. However, this overlaps with existing funding for private school educational environment improvements (1.2489 trillion won) and the Future Response Fund's support for R&D infrastructure (362.41 billion won), raising concerns about redundant investments.
Additionally, the regional balance development special account has already funded high-cost equipment for collaborative research programs, making the distribution of cash for equipment to individual private universities a classic example of budget waste and overlapping investments. A planning director from University B in the Chungcheong region stated, "If each university builds its own high-cost AI infrastructure or research equipment, some will face overload while others will have idle equipment, leading to severe inefficiencies. The government should focus on consolidating high-cost computing resources and research infrastructure around a central platform, allowing nearby private and smaller universities to share and utilize these resources effectively."
The director further noted, "Recent government financial projects in higher education seem to be merely rebranding existing initiatives without any differentiated innovation. The frequent renaming of projects and uniform top-down approaches are consuming significant administrative resources, and to revitalize the regional higher education ecosystem, we must shift from concentrated investments in national universities to sustainable, platform-centered infrastructure policies."
Additionally, the regional balance development special account has already funded high-cost equipment for collaborative research programs, making the distribution of cash for equipment to individual private universities a classic example of budget waste and overlapping investments. A planning director from University B in the Chungcheong region stated, "If each university builds its own high-cost AI infrastructure or research equipment, some will face overload while others will have idle equipment, leading to severe inefficiencies. The government should focus on consolidating high-cost computing resources and research infrastructure around a central platform, allowing nearby private and smaller universities to share and utilize these resources effectively."
The director further noted, "Recent government financial projects in higher education seem to be merely rebranding existing initiatives without any differentiated innovation. The frequent renaming of projects and uniform top-down approaches are consuming significant administrative resources, and to revitalize the regional higher education ecosystem, we must shift from concentrated investments in national universities to sustainable, platform-centered infrastructure policies."
Large-scale new projects bypassing adequacy review; thorough scrutiny by the National Assembly inevitable
Concerns arise as large-scale new projects within the Future Response Fund have skipped even the minimum verification procedures mandated by law. Projects such as the 'First Career Project' (4.65 trillion won), 'Future Talent Growth Fund' (6.91 trillion won), and 'Infrastructure Support for Private University STEM Facilities' (6 trillion won) total 17.56 trillion won and are exempt from preliminary feasibility studies under the National Finance Act.
According to Article 38, Section 5 of the National Finance Act, projects exempt from feasibility studies must undergo prior review by the Minister of Planning and Budget, and the results should be reflected in the budget preparation. However, the government submitted a budget exceeding 17 trillion won to the National Assembly before the adequacy review results were available. This means that the justification for financial input and long-term funding strategies have not been objectively verified before being presented to the National Assembly under the guise of 'future response.'
Jeon Byeong-hoon, Chair of the National University Planning Directors Council, criticized this approach in a conversation with Aju Economy, stating, "The submission of major new projects worth 17 trillion won to the National Assembly without completing the required adequacy review is a hasty budget preparation lacking procedural legitimacy. Projects that carry grand titles but lack detailed implementation plans and management strategies will inevitably lead to severe administrative confusion and financial mismanagement in the field."
He added, "The educational perspective of planning for the next decade has been lost, with short-term, trend-driven projects emerging in response to the current semiconductor and AI boom. During the National Assembly's budget review process, the feasibility of projects that bypassed adequacy reviews must be thoroughly re-evaluated, and a significant restructuring of expenditures should be undertaken to eliminate overlapping support and siloed budgets across departments."
According to Article 38, Section 5 of the National Finance Act, projects exempt from feasibility studies must undergo prior review by the Minister of Planning and Budget, and the results should be reflected in the budget preparation. However, the government submitted a budget exceeding 17 trillion won to the National Assembly before the adequacy review results were available. This means that the justification for financial input and long-term funding strategies have not been objectively verified before being presented to the National Assembly under the guise of 'future response.'
Jeon Byeong-hoon, Chair of the National University Planning Directors Council, criticized this approach in a conversation with Aju Economy, stating, "The submission of major new projects worth 17 trillion won to the National Assembly without completing the required adequacy review is a hasty budget preparation lacking procedural legitimacy. Projects that carry grand titles but lack detailed implementation plans and management strategies will inevitably lead to severe administrative confusion and financial mismanagement in the field."
He added, "The educational perspective of planning for the next decade has been lost, with short-term, trend-driven projects emerging in response to the current semiconductor and AI boom. During the National Assembly's budget review process, the feasibility of projects that bypassed adequacy reviews must be thoroughly re-evaluated, and a significant restructuring of expenditures should be undertaken to eliminate overlapping support and siloed budgets across departments."
* This article has been translated by AI.
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