In-depth review of the non-military budget: Education

This analytical note is part of a series of reviews of the non-military budget-2026 and is dedicated to education expenditures. General statistics on non-military budget expenditures are available via the link. We conducted this study with the support of the International Renaissance Foundation.

The education sector remains one of the key areas of public finance. In 2026, education ranks fifth in the structure of state budget expenditures, just as it did in 2021 before the war. However, following the start of the full-scale invasion, funding for the sector has been reducing in real terms. 

In 2026, an increase in expenditures is planned, reaching 2.8% of GDP (+0.6 p.p. compared to 2025); however, this level still falls short of the pre-war level of 2021 (3.1% of GDP).

The main area of education, which accounts for about half of all spending, is secondary education. Higher education ranks second.

Since 2022, the number of school-age children has decreased sharply

After 2022, the number of school-age children in government-controlled territory has sharply decreased due to migration and occupation. About 1 mln school-age children are currently abroad (excluding the territories of Belarus and Russia). Another 300,000 are in temporarily occupied territories (excluding Crimea). 

As a result, there are fewer children in schools. The situation is worse in small towns and villages. In rural schools, there are on average 7 pupils per teacher, compared to 12 pupils in urban schools. The quality of education suffers as well – small schools cannot always provide teachers for all subjects. 

Education subvention decreases in real terms 

The main budget program for education is the education subvention, which is transferred to local budgets to fund general secondary education. The education subvention is the key source of funding for teachers’ salaries.

Since 2024, the amount of the subsidy has been nominally “frozen” at ~UAH 103 bn, but in real terms (adjusted for inflation), it has been declining. This has reduced the funds available for teachers’ salaries.

To fix the situation, it was planned to increase teachers’ salaries by 30% starting in January 2026 and by another 20% starting in September. 

For this purpose, funds from the new “Prestige of employment in education” program were redirected mid-year to the education subvention, which reached UAH 129 bn.

This was expected to lead to higher salaries in the education sector.

Teachers’ salaries need to be reformed

The freeze on education subvention and the stagnation of secondary education reforms have led to salaries crisis in the education sector. This has resulted in a decline in the competitiveness of teachers’ salaries and an outflow of qualified and dedicated educators, which directly impacts the quality of education and human capital in the future.

We recommend: clearly defining a mechanism for increasing salaries to ensure decent compensation for all education sector employees in the long term. 

Higher education is overly fragmented

Due to the full-scale invasion, part of the youth left the country, part remained in the occupied territory, and some chose to enlist in the military. As a result, the number of students has decreased. However, the number of students is declining more slowly than the number of people of university age – by 13% compared to 29%.

At the same time, funding for higher education is decreasing in real terms.

Additionally, some higher educational institutions (HEIs) ended up under occupation, while others were forced to relocate. However, not all relocated HEIs are able to fully provide higher education services. 

We recommend: continuing the policy of modernizing higher education institutions – first and foremost, modernizing relocated HEIs and branches with small numbers of students (if they are not city-forming or do not serve an important function), paying special attention to displaced institutions. 

Our general recommendation regarding budget expenditures on education is to define long-term funding priorities and focus resources on reforms already started.

For more details on these and other challenges in funding the education sector in Ukraine, see the study.