The new law on higher education was passed by the Hungarian Parliament in May 2005. It reforms the structure of the tertiary education sector and the basis of the direction of higher education institutions.

As of 2006, a 3-cycle system will be launched (except for specialized fields such as medicine or art): three-year Bachelors, two-year Masters, and three-years for PhD studies. In accordance with the new system of financing, financial support and allowances will depend on the prevailing average earnings.  In order to separate the professional and financial directions, new bodies charged with the financial management of higher education institutions will be set up, where representatives from the business sphere will be delegated by the Ministry of Education.

Grants from Norway
The European Economic Area (EEA) and Norway will provide funding of 27 million Euros per year to Hungary over a five-year period. The contract was signed on 10 June 2005, in Budapest and will have an impact on education, training and research.

After the accession of 10 new countries to the EEA, the three EEA EFTA members, Iceland, Liechtenstein and Norway established the EEA Financial Mechanism. In addition, Norway established a separate Norwegian Financial Mechanism through which it offers a contribution towards cohesion within the enlarged EEA. Funding is available for projects in a wide range of priority sectors. Norway highlighted civil protection, public health and environment as the most important areas, but education and training as well as research and technological development are also among the priority sectors.