The Gansu Basic Education Project (GBEP) was launched in 1999 with the goal of helping one of the poorest parts of China to achieve universal basic education. The project aims particularly to assist minority children and girls, and has had a significant impact. The reasons why children do not enrol in school, or drop out at an early stage, are many and complex. This study focuses on the costs of schooling to households. These costs can be a heavy burden, and may be a major obstacle to universalisation of basic education. The GBEP has aimed to reduce the costs to poor households in various ways. This study examines the arrangements for financing education at county and school levels. Among other project components, it focuses on the effectiveness of a targeted scholarship scheme for poor children, a reformed system of education budgeting, and a free-lunch programme.