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EACEA National Policies Platform:Eurydice
Funding in education


3.Funding in education

Last update: 16 April 2024

Public education and vocational education and training (VET)

Under the Fundamental Law of Hungary, it is the public service task of the Hungarian state to ensure the right to free and compulsory primary education, as well as to free secondary education accessible for all, until a certain age, depending on the type of school. The previous Public Schooling Act, and then the now effective Act CXC of 2011 on the National Public Education (2011. évi CXC. törvény a nemzeti köznevelésről)  both consider the performance of public education tasks as a public service provided free of charge.

Budgetary resources have played the main role in funding both kindergarten care, as well as primary and secondary education (ISCED 1–2 and ISCED 3). While kindergarten education is partly funded by municipalities, and the funding of primary and secondary education used to be partially a municipality task, in some cases foundations were established and operated to expand the funding possibilities of the institutions. The budgetary funds reach and have reached public educational institutions through the maintenance entities. Until 1 January 2013, the maintainers were typically the local municipalities; however, with the entry into force of the Public Education Act, this situation completely changed. Both the Public Schooling Act and the Public Education Act recognise the concept of non-state maintainer entities (church, ethnic government, and private maintenance entities), and the funding of institutions maintained by them differs greatly from the funding of the state institution system.

Between 1 January 2013 and 31 December 2016, the public education maintenance tasks – except for kindergarten education – were taken care of by the state, until via the national school maintenance centre (Klebelsberg Intézményfenntartó Központ /National School Maintenance Centre/, KLIK). An essential change was the separation of maintenance and operational tasks. In the case of villages with a population of less than 3,000 people, the operational tasks of public educational institutions were also performed by the state, while the local municipalities of towns with a population of over 3,000 were, as a rule, operators of the public education institutions owned by the municipality within their administrative territory and managed by KLIK.

By placing public educational institutions under state maintenance, the goal was to reduce the differences in quality between schools and to equalise the differences in quality resulting from the different income-generating capabilities of municipalities.

The centralised operation of the sole state maintenance entity and the separation of maintenance and operational tasks caused many difficulties in the daily functioning of public education institutions, which is why changes were necessary. From 1 January 2017, the institution maintenance tasks of KLIK have been performed by the school district centres operating as independent budgetary units (initially 58, currently 60), facilitating the decentralisation of the system. The KLIK in its former form has ceased to exist and has been replaced by the Klebelsberg Centre (KK). With the above reorganisation of the maintenance model and the fact that the municipalities no longer had operational tasks, the maintenance and operational tasks of the institutions were once again in the same hands, within the competence of the school district centres. This eliminated the duality of funding that caused many conflicts (operation from the municipality budget, and maintenance from the state budget). School district centres can make decisions at the expense of their own budgets, which facilitates a more effective decision-making mechanism adjusted to the local conditions, and at the same time, results in the decentralisation of the maintenance system that ensures the performance of the state's task related to public education.

KLIK's legal successor, the KK – in contrast to the former KLIK – performs neither maintenance nor operational tasks. As a mid-level governing body, taking into account the independence of the school district centres, it ensures the uniform enforcement of sectoral considerations, the professional and strategic coordination of the maintenance activities of the school district centres. Furthermore, the KK also carries out efficiency and financial control of the activities of the school district centres.

It remains the mandatory task of municipalities to ensure kindergarten education by maintaining kindergartens, and the municipalities provide meals for children in schools managed by the school district.

Another measure was that from September 2015, participation in kindergarten education became mandatory in Hungary from the age of 3. This serves the early daytime education of 3-year-old children in an institutional setup on the one hand, and enhances the quality of life of families and the return of parents to the labour market on the other hand.

In 2015, the maintenance of state-maintained schools providing vocational training and education (VET) – with some exceptions – was taken over taken over by the Minister responsible for vocational education and training under the Ministry of National Economy, from 2018 under the Ministry of Innovation and Technology and from 2022 under the Ministry of Culture and Innovation. Part of the maintenance rights and central management rights are exercised by the National Office of Vocational Education and Training and Adult Learning (Nemzeti Szakképzési és Felnőttképzési Hivatal, which is a background institution of the above mentioned ministries. It carries out its duties through 41 VET centres, which include 359 institutions in the 2023/2024 academic year. The Innovative Training Support Center Plc (Innovatív Képzéstámogató Központ Zrt. - IKK Zrt.) was established in 2019 with the purpose to participate, as a methodological centre, in the renewal of VET, and to provide the tasks delegated and entrusted to IKK Zrt. as a state administration body for VET, by the minister responsible for vocational training and education, according to the new VET on vocational training and education (Act LXXX of 2019). 

From September 2020, the VET system has been operating separately from the public education system, and its funding differs from that of public education institutions. As a general rule, the basic task of VET can be performed by a VET institution (5-year technicum (technikum) and vocational school), and the basic task of public education is performed by a public education institution. In the cases and the form specified by law, a multi-purpose public education institution can perform the basic task of VET, and a multi-purpose VET institution can also perform the basic task of public education.

The main institutional change is that most vocational secondary schools were transformed into five-year (in some cases 6-year) technicums (technikum) and secondary vocational schools specialising in professions have become vocational schools, in which the training period continues to be three years (in some cases 4 years). With these three-year training courses, a profession can be acquired, while after completing the technicum education, a secondary school graduation certificate and a diploma certifying the acquisition of the profession can be obtained. 

Instead of the 759 professions listed in the previous National Vocational Qualification Register(OKJ), in the new system, the 2023 Register of Vocational Qualifications contains 178 eligible basic vocations.

A VET institution operating as part of a VET centre is an organisational unit of the VET centre with legal personality, which does not have an independent budget. The budget of the VET institution operating as part of the VET centre must be planned in line with the average costs of the expenditure needs for the basic VET task provided by it, according to the level of public services expected to be provided by the VET institution.

In state-maintained vocational secondary schools under the National Public Education Act, in addition to general knowledge subjects, students study the fields of art, public culture and pedagogy according to a framework curriculum based on programme requirements. Vocational schools also continue to operate as public education institutions. Vocational schools provide general-knowledge education adapted to the type of the specific educational requirement, and vocational education as well as professional training providing preparation for the vocational qualification according to the VET Act (2019. évi LXXX. törvény a szakképzésről) Vocational education in vocational schools can take place for the vocational occupations specified in the Register of Vocational Qualifications – depending on the type of specific educational need – according to the Programme Outcomes Standards and Requirements or a special framework curriculum prepared based on the Programme Outcomes Standards and Requirements, while vocational training can take place according to a special framework curriculum prepared based on the programme requirements.

VET and adult education

Financial and technological changes have drawn attention to the need of the national economy for a flexible education and training system that can quickly adapt to the needs of the labour market. As a result, the “VET 4.0” strategy was elaborated and then adopted in 2019, resulting in a radical change both in VET and in the adult education system. In terms of the training structure, one of the most significant changes impacted 178 basic vocations that, starting from autumn 2019, can only be taught in VET institutions, regardless of age. An additional effect of this is that the current Hungarian education system does not differentiate based on age, but the training determines whether someone participates in VET or adult training. The same applies for the distinction between public education and adult training. As, for example, if someone enrols as an adult in an evening correspondence course which prepares for secondary school graduation, this falls within public education in the same way as a similar course for people under the age of 18.

At the same time, compared to the pre-2020 period, the categories of training falling within the scope of the Adult Education Act (2013. évi LXXVII. törvény a felnőttképzésről) were considerably expanded. Currently, as a general rule, all training programmes targeted at skill acquisition or development falls under the scope of the act, including so-called internal training organised for employees. Exceptions include, inter alia, courses that are part of the core activities of public education, VET, or higher education institutions, as well as internal in-service courses of less than 6 hours. 

Of particular note are statutory training courses (formerly known as authority training courses), which have been governed by adult learning rules since 2020, but only in a limited scope (notification, data provision). 

The reformed adult training also brought changes in terms of funding. Now, in addition to budgetary subsidies from the national budget and EU funds, scholarships can also be awarded to participants in adult training. And since the summer of 2021, a loan is also available for those who take part in vocational training, training for a partial vocation or training of priority importance for the national economy. While at the start of the training loan available in adult training, the subsidised-rate training credit could be used to support living costs in addition to the training fee, from the end of 2021 this has only been available for funding the training fee. 

The regulations concerning VAT payable for the training have also changed. Currently, trainings organised under the law are exempt from VAT, if the training provider provides the requested data concerning the adult training; as well as language training, and professional training and training for partial vocation.

Higher education

The strategic document discussed by the government on 22 December 2014, Shifting of Gears in Higher Education (Fokozatváltás a felsőoktatásban ) stated as a sectoral goal the establishment of a performance-oriented higher education system that provides a higher quality together with the efficient utilisation of resources. The purpose of this is to create and operate a higher education system that is well positioned in the international education and research sector, responds quickly to social challenges, and fundamentally determines the economic competitiveness of the country. The keywords of this are competition, quality, performance and success.

Hungarian higher education consists of higher education institutions managed in various forms. These institutions can be colleges or universities. The institutions operate with different maintenance models. 

Based on Hungarian knowledge, innovation and talent, a new model of public trust has been introduced, which is more responsive to the needs of the economy and public services, with a public service mission that works more effectively with businesses. 21 previously state-maintained universities have been placed under the maintenance of such trusts. From September 2021, more than 180,000 students, i.e. nearly seventy percent of the students began their studies at a model-changing institution. In addition, the proportion of church-managed institutions is significant (30,000 people), while six institutions remain state-maintained. Furthermore, there are private higher education institutions. 

Public spendings on education

Reviewing the period between 2010 and 2020, it can be seen that, total public expenditure on education as a share of GDP showed a downward trend until 2013: it decreased from 4.6% to 3.9%. After 2013, expenditures to GDP gradually increased (to 4.4% by 2016), then stayed at 4.2-4.3% in 2017-2018. In 2019, despite the increase of amounts in expenditures, overall public spending on education to GDP decreased to 3.9%, then further decreased in 2021 to 3.5%, even though expenditures at nominal value continued to increase.

Source: Central Statistical OfficeSource: Central Statistical Office

In nominal terms, for the entire period between 2005 and 2021, expenditures increased significantly (by 153%). 

Source: Central Statistical Office

Source: Central Statistical Office

The increase in kindergarten expenditure is spectacular (at almost 76%), while that of primary, secondary and higher education is more modest. The budget for primary and secondary education (ISCED 1–3) decreased year by year between 2010 and 2013, after the previous fluctuation, and then increased significantly; thus the increase was 38.5% for the whole period between 2005–2021. Following a previous fluctuation, an increase can be seen also in higher education (ISCED 6), which resulted in a 69% increase for the period as a whole. 

Source: Central Statistical Office (in 2014, the institutional reporting switched to accounting according to government functions, so the data can only be compared with data from previous years to a limited extent.) 

Source: Central Statistical Office (in 2014, the institutional reporting switched to accounting according to government functions, so the data can only be compared with data from previous years to a limited extent.)