Prabowo Wants Free Education, but Budget and Illiteracy Pose a Tough Test

President Prabowo Subianto on 18 September 2026 called for tuition at state schools and state universities to be made free. The call was immediately followed up with a limited meeting at the Merdeka Palace on 23 September 2026 to design a quality free education scheme. However, the government signaled that for higher education, the policy will be implemented gradually, taking into account the country's fiscal capacity.

The idea is not merely a political promise. If realized, free education could become one of the most impactful social policies in recent decades. Education is the gateway to social mobility, higher productivity, and a nation's ability to adapt to technological change. Yet this grand ambition faces the reality of an inelastic budget and unresolved structural challenges.

In his state address on 14 August 2026, Prabowo stressed that human development is the main foundation, starting with meeting basic needs so that children can learn well. This framework aligns with the human capital theory developed by Theodore W. Schultz (1961) and Gary Becker (1964), which views education as a productive investment, not merely social spending. Amartya Sen (1999) even emphasized that education expands human capabilities to choose and participate in social life.

Although basic literacy gains have improved, the remaining illiteracy rate is still a major task. When that small percentage is multiplied by Indonesia's population of hundreds of millions, the absolute number cannot be ignored. Those who are illiterate face limited access to formal work, health services, and political participation. Free education must reach this group, not only those already in school.

On the financing side, eliminating fees at state schools and campuses requires a clear funding source. The education budget in the state budget (APBN) is indeed allocated at 20 percent, but most of it is absorbed by teacher salaries and operations. The government needs to redesign spending items, seek efficiency, or tap new revenue sources. Without that, the free education promise could become a fiscal burden that sacrifices quality.

"Free education is not just about removing fees, but ensuring that parents' economic capacity does not determine how far a child can develop their potential," goes the core argument often made by education economists.

For investors and market players, this policy sends mixed signals. On one hand, improved human resource quality can drive long-term productivity and investment appeal. On the other hand, large financing needs could squeeze fiscal space, which may affect government bonds and interest rates. Businesses also need to watch whether the graduates produced will have skills relevant to industry needs.

The government recognizes that free tuition cannot be applied immediately at all campuses. Besides budget constraints, quality gaps between state universities and between Java and outside Java are challenges. If not managed carefully, this policy could widen access inequality. Therefore, the implementation stages must be accompanied by a clear road map, measurable targets, and transparent evaluation.

Going forward, the crucial question is not only whether free education can be realized, but whether this policy will truly improve learning quality and close the illiteracy gap. Without improvements in teacher quality, curriculum, and infrastructure, free fees will only be a symbol without substance. The public has the right to demand details of the scheme, including funding sources and a definite schedule, so that this promise does not remain mere discourse.