Education in Panama is compulsory for the first six years of primary education and the six years of secondary school. As of the 2004/2005 school year there were about 430,000 students enrolled in grades one through six (95% attendance). The total enrollment in the six secondary grades for the same period was 253,900 (60% attendance). More than 91% of Panamanians are literate.
As of 2004, more than 92,500 Panamanian students attended the University of Panama, the Technological University of Panama, West Coast University – Panama, Polytechnic University of Central America and the University of Santa Maria La Antigua, a private Catholic institution. Including smaller colleges, there are 88 institutions of higher education in Panama.
Public education began in Panama soon after separating from Colombia in 1903. In 1906 the Panama College was found by Methodists. Nowadays it is called the Panamerican Institute, one of the best private colleges in Panama. The first efforts were guided by a paternalistic view of the goals of education, as evidenced in comments made in a 1913 meeting of the First Panamanian Educational Assembly: "The cultural heritage given to the child should be determined by the social position he will or should occupy. For this reason, sex education should be different in accordance with the social class to which the student should be related." This elitist focus changed rapidly under United States influence.
By the 1920s, Panamanian education subscribed to a progressive educational system, explicitly designed to assist the able and ambitious individual in search of upward social mobility. Successive national governments gave a high priority to the development of a system of (at least) universal primary education. In the late 1930s, as much as one-fourth of the national budget went to education. Between 1920 and 1934, primary-school enrollment doubled. Adult illiteracy, more than 70 percent in 1923, dropped to roughly half the adult population in scarcely more than a decade.
By the early 1950s, adult illiteracy had dropped to 28 percent. The rate of gain had also declined and further improvements were slow in coming. The 1950s saw essentially no improvement; adult world life illiteracy was 27 percent in 1960. There were notable gains in the 1960s, however, and the rate of adult illiteracy dropped 8 percentage points by 1970. According to 1980 estimates, only 13 percent of Panamanians over 10 years of age were illiterate. Men and women were approximately equally represented among the literate. The most notable disparity was between urban and rural Panama; 94 percent of city-dwelling adults were literate but less than two-thirds of those in the countryside were—a figure that also represented continued high illiteracy rates among the country's Indian population.
From the 1950s through the early 1980s, education enrollments expanded faster than the rate of population growth as a whole and, for most of that period, faster than the school-age population. The steepest increases came in secondary and higher education enrollments, which increased ten and more than thirty times respectively. By the mid-1980s, primary school enrollment rates were roughly 113 percent of the primary-school-aged population. Male and female enrollments were relatively equal overall, although there were significant regional variations.
Enrollments at upper levels of schooling had increased strikingly in relative and absolute terms since 1960. Between 1960 and the mid-1980s, secondary-school enrollments expanded some four-and-a-half times and higher education nearly twelve-fold. In 1965, fewer than one-third of children of secondary school age were in school and only 7 percent of people ages 20 to 24 years. In the mid-1980s, almost two-thirds of secondary-school-age children were enrolled, and about 20 percent of individuals ages 20 to 24 years were in institutions of higher education.
Currently Panama has an overall literacy rate of more than 94%.