The age of reform has given way to the development of fresh, revolutionary, and reformist educational policies, including a shift in how education is implemented from centralistic (old order) to decentralized (new order and reform). In order to address the demands of national education at this time, the government implemented the 1945 Constitution's mandate by giving the education budget a priority that equaled at least 20% of the State Expenditure Budget and the Regional Expenditure Budget.
Since 1998, Indonesia has been in a transitional period marked by a rising democratic process. With the implementation of Act No. 20 of 2003 on the National Educational System, democracy has also entered the field of national education.
As stated in Law No. 32 of 2004 on Local Government, the central government no longer has primary responsibility for education; instead, local governments are now in charge of it. Only a small number of central government duties are still in place. Decentralization and centralized educational systems are two impacts and changes that have come with the reform era and will both have significant influence on the country's educational system. Typically, reforming Islamic education has a number of political repercussions, such as:
1. Law No. 20 of 2003
The Pesantren, Ma'had Ali, Roudlotul Atfal, and Taklim Assembly were also named as being a part of the National Education System.
2. The establishment of the APBN and APBD's 20% budget increase policy
3. According to government policy, madrasahs are public schools that are defined by religious teachings.
4. From the Reformation to the present, Islamic education in Indonesia has been plagued by a number of issues, such as:
5. Using traditional Islamic philosophy
6. The system of Islamic education itself suffers from a conceptual crisis or scientific constraint.
7. A split between educational institutions that placed a strong emphasis on either a religious or scientific element of the field of knowledge gave rise to the institutional crisis.
8. Crisis Orientation, Islamic educational systems or institutions tend to be more focused on the past than the present.
9. It still heavily relies on the government-outlined educational model, which emphasizes education as a means of advancing development initiatives. 11. Lack of funds so that Islamic education is oriented to all consumers of Islamic education is also dictated by employment determining institutions.
11. There's still a national education system.
12. Cultural development and rapid community change make the educational world more powerless to compete with the pace of community change and cultural development.