History of LPDP Since 2011: Legal Basis, Objectives, and Its Role
The Education Fund Management Institution, known as LPDP, is one of Indonesia’s most important institutions. While many members of the public are familiar with LPDP through its scholarship programme, not everyone is aware of its history and the circumstances of its establishment.
The history of LPDP is closely tied to the government’s commitment to preparing long-term education funding. The following explanation, compiled from LPDP’s official website, outlines its background, legal basis, and the objectives behind its formation.
Early Formation
According to its official website, the LPDP scholarship programme originated from a constitutional mandate stipulating that a minimum of 20 per cent of the State Revenue and Expenditure Budget (APBN) be allocated to the education sector. This provision was subsequently acted upon by the government together with the House of Representatives (DPR) in 2010, when they agreed to establish the National Education Development Fund. The fund was designed as an endowment fund and managed through a Public Service Agency (BLU) mechanism.
The following year, the Ministry of Finance and the Ministry of Education and Culture reached an agreement on the management of the fund. Management was placed under the Ministry of Finance, with personnel drawn from both ministries.
Legal Basis
As a follow-up measure, LPDP was officially established as a work unit within the Ministry of Finance on 28 December 2011. Subsequently, through Minister of Finance Decree Number 18/KMK.05/2012, dated 30 January 2012, LPDP was designated as an institution applying the BLU financial management model, with a focus on developing the quality of human resources to support the acceleration of national development.
The LPDP scholarship programme was first opened to the public in 2013 through an online registration system on its official website. Since then, LPDP has continued to fulfil its role in managing education funds and channelling them to support improvements in the quality of Indonesian education and human resources.
Objectives and Role
According to LPDP’s official explanation, the institution’s primary task is to manage the education endowment fund. This fund is used to support education financing through various strategic programmes.
In addition, the managed funds are utilised to support research activities, the rehabilitation of educational facilities, and other programmes relevant to improving the quality of national education. Beyond its scholarship programme, LPDP also carries out research funding functions and other strategic programmes related to national education development.
LPDP states that the management of this fund aims to prepare Indonesia’s future leaders and professionals through education financing. Through the management of the education endowment fund, the institution is expected to continue supporting the emergence of Indonesia’s outstanding future generations.