Since 1990 Mongolia has shifted to a democratic society and market economy in a relatively short time span. The gap between urban and rural areas has been expanding in many social strata. This process affected the entire education system as well. With emphasis on education as a basis for further development of the country, Mongolia had to tackle with the urgent issues in education and struggle to eliminate the difference between urban and rural areas in particular. This research attempted to study the current state of the education policy, the actual outcome of the government policy implementation in dealing with urgent issues in education and shed light on the extent of policy implementation, outcomes and problems encountered by the educational establishments in the rural area. Thus, in this research we tried to study education policy implementation and paid particular attention to implementation of the policy aimed to lessen the centralization in educational management since the latest law on education passed in 2002. This study focuses on education policy implementation, outcomes and problems; in addition, it attempted to reveal some specifications and limitations of education policy management in Mongolia.