To assess the status of Iranian educational system within a special conceptual framework of economic development, a number of existing documents related to the expenditure of oil revenues on education were critically reviewed. The results show that within any economic framework in which sustainable development is sought, the oil revenues can be utilized for the development of human resources. Utilizing oil revenues through education to improve people's capabilities can lead to more freedom and a better life. Doing so is a just act and compatible with the implicit social contract between people and government.  However, the existing documents show that the Iranian government's performance in this area has not been adequate, hence, it is suggested that decisions on apportioning the oil revenues should be left to a governmental body other than the administration and parliament.