Southern Shaanxi, rich in folk song culture, faces significant challenges in preserving its musical heritage due to rapid modernization, technological advancements, and social changes. The primary objective is to investigate the educational literacy development and transmission processes of Chinese folk songs in Southern Shaanxi under contemporary status. The research site encompasses cities like Hanzhong and Ankang, with seven key informants, including folk song practitioners, educators, cultural experts, students, and community members, provided insights through interviews, observations, and document analysis. Thematic analysis was employed to identify patterns and themes related to educational literacy development, transmission processes, and cultural influences. The results indicate that integrating folk songs into educational curricula enhances language acquisition, critical thinking, emotional expression, and cognitive skills while revealing challenges such as the loss of traditional environments, the complexity of singing techniques, and economic constraints. The study suggests embracing technological innovations, fostering community involvement, and implementing supportive policies to sustain the transmission of Chinese folk songs and promote cultural literacy among younger generations.