While Estonia's education expenditure amounted to nearly 5% in 2006, the corresponding average indicator in EU countries was 5.5%. Estonia also lags considerably behind Scandinavian countries, where the average figure stands at 6.5%3. In 2008, education expenditure constituted 5% of Estonia's GDP. The small increase after the low point in 2006, when the indicator was 4.8%, was caused primarily by the slowing growth of the GDP – Estonia’s GDP grew by 4% in 2008, while educational expenses increased by 7%. During the three previous years, these indicators averaged at 17% and 15%, respectively.

Since 2004 the European Union has been supporting the areas of education, research and development in Estonia through the European Social Fund (ESF) and the European Regional Development Fund (ERDF). The EU funding is aimed at equalizing the level of social welfare and economic development in the Member States.

For Estonia, the second period of funding from the Structural Funds began in 2007 and will last until 2015. During the period 2004–2006, funding for education and research in Estonia amounted to 500 million EEK by the ERDF, and approximately the same amount was received from the ESF, with the government providing co-funding of 20–25%. However, during the more recent funding period, the Structural Funds can be used to support the areas of education, language, youth and research with a total of 10.5 billion EEK with additional state co-funding. The last activities of the projects of the first period (2004–2006) expired in 2008.

The funding is based on three implementation plans approved by the European Commission.