Financing for equity in primary and secondary education
1. Education resources to subnational governments
2. Education resources to schools
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
In Mongolia, general education is governed by the 2002 General Law on Education, revised in 2023. Together with the 2011 Budget Law, these laws form the primary legal framework for education finance.
The central government provides support through the national state budget to Aimag (provincial) and Capital City governments using earmarked transfers, contributions to the Local Development Fund, financial support transfers, and allowances for governments’ own revenues.
Aimag and Capital City governments pass resources to Soum (district) governments, keeping the same types of funding, including financial support transfers, earmarked transfers, local development funds, and local government revenues. District governments distribute funds to educational institutions. General schools get local budget transfers, generate income through activities, and may use local development funds.
Funds move from central to provincial and district levels before reaching institutions. Each institution manages resources from budgetary support, locally generated revenue, development funds, and service fees. Earmarked funding ensures resources are used for education purposes.
The Ministry of Education and Science, together with local governments, manages budget allocations using programme-based approaches. School directors manage internally generated and transferred funds. Annual budgets include input from local assemblies to make sure each level of government and educational organisation receives funding suited to its services.
The World Bank illustrated these financial flows, showing how funds move from central authorities through local departments to schools, highlighting the structured progression of education financing in Mongolia.
1. Education resources to subnational governments
Mongolia is divided into three administrative tiers. At the highest level, there are 21 provinces, called aimags, and the capital Ulaanbaatar. Provinces are subdivided into soums, which are further divided into bags. In Ulaanbaatar, there are nine districts (düüregs), which are further divided into subdistricts (khoroos). The Ministry of Education develops national education plans that guide soums and düüregs in creating their own plans. Implementation is managed through contracts between government levels, which outline financial use, service standards, and reporting requirements.
The main funding source for subnational governments is earmarked transfers from the central government. According to Mongolia’s Long-Term Development Policy Vision 2050, in 2018, 64% of total education expenditure on general education was sent to local governments for disbursement to schools. The Ministry distributes these funds to soums and düüregs, which then allocate them to bags and khoroos. There is no publicly available formula for equity-based allocation.
Local Development Fund
Subnational governments may also receive resources from the Local Development Fund (LDF), funded through taxed mineral royalties. Managed locally, the LDF is allocated and used at the discretion of each province, soum, district, düüreg, and the capital city.
2. Education resources to schools
Funds are allocated to schools from the soum or district government on a per-capita basis. With the passage of the revised Education Act in 2023, the education sector has adopted a funding system based on principles of performance, results-based approaches, independence, transparency, and efficiency to incentivise quality improvements in schools.
Per Article 38 of the Education Act, schools are allocated basic operational costs, which cover school activities, property maintenance, and fixed expenses; variable costs based on student numbers, class sizes, program needs, and teacher professional development; and performance-based incentives. The variable costs component is calculated by the government at each level of educational institution in order to provide equal opportunities for learning, taking into account the location of the school, professional field, programs, and different needs of students. No specific formula for the allocation of variable costs is specified. Performance-based allocations consider educational quality, learning outcomes, and institutional management, ensuring that schools demonstrating higher effectiveness receive more support. The government determines these allocations.
Education Provision for Nomadic and Mobile Populations
According to Mongolia’s Long-Term Development Policy Vision 2050, between 25% and 40% of the Mongolian population is nomadic, working as herders, while an additional number of people work in professions that require regular migration. The construction of dormitories for herders’ children to attend primary and secondary school aims to provide access to continuous education, accommodate the mobility of families, and support students in completing their schooling despite the challenges posed by a nomadic lifestyle.
3. Education resources to students and families
Improving Primary Education Outcomes for the Most Vulnerable Children in Rural Mongolia
The "Improving Primary Education Outcomes for the Most Vulnerable Children in Rural Mongolia" project was implemented from 2012 to 2017 jointly by the Ministry of Education, Culture, Science and Sports of Mongolia and Save the Children, with funding from the World Bank and the Japan Social Development Fund. The project provided resources to 30 remote schools and aimed to enhance access to primary education for children aged 5 to 10 from herder families in rural regions. Initiatives included a Compensatory Education Program for out-of-school children aged 8 to 10. The project focused on increasing school enrolment, supporting children in catching up on missed learning, and strengthening overall educational outcomes in the targeted areas.
Provision of Textbooks and Uniforms
The government aims to cover the distribution of textbooks and the provision of school uniforms and learning materials for vulnerable students. A stated goal in the Long-Term Development Policy Vision 2050 is to enable a support system targeting primary school-age children from low-income families by creating a fund for primary education textbooks, providing services for textbook leasing and rotational use, offering discounts on school uniforms, and ensuring that the state can cover a portion of living costs in dormitories and travel expenses.
4. Social policies and family support programmes
Mongolia's Child Money Programme (CMP) is a flagship social protection initiative providing cash transfers to children aged 0 to 17 years. The programme is financed through the Human Development Fund, which accumulates revenues from mineral resource taxes. Launched in 2005, it initially targeted poor households, offering a payment of MNT 20,000 per month per child, with school enrolment as a condition of transfer. In 2012, the programme evolved into a universal benefit, with payments now distributed through automatic bank transfer, contributing to its wide coverage.
Following an increase in monthly payments during the COVID-19 pandemic, fiscal pressures led the government to announce plans in 2023 to scale back the programme for the wealthiest nine percent of families. This decision was later revoked, maintaining near-universal coverage. As of 2025, the CMP provides a monthly allowance of MNT 100,000 to all children in Mongolia.
5. School meal programmes
The government of Mongolia funds a School Lunch Programme five days per week for primary school students. Initiated in 2006 as a snack programme, it expanded to provide full lunches following the passage of the School Lunch Law in May 2019. The programme aims to ensure students receive adequate nutrition, supporting cognitive function, concentration, and overall academic performance. It also provides social support for low-income families through free or subsidised meals and seeks to combat malnutrition and improve children's overall health. According to GCNF data, the programme operates with the support of 13 nutritionists.
