It's an "Upgrade".
"Improvement" is flipping a reduced side unit back to it's full strength side.
The "Free Education" is not a flipping from reduced to full, but an upgrade of a single sided unit to a stronger single sided unit.
[7.1] Improving Reduced-Strength Units to
Only two-step units currently on the map on their reduced
side can be Improved (flipped over) to their full-strength
side. The following cost is incurred for each unit:
[7.2] Free Soviet Upgrades “Education”
Starting on Turn 6, the Soviet player can
Upgrade one unit for free (i.e., no card cost)
per Soviet Organization Phase. An upgraded
Soviet unit is flipped to its stronger, red-colored
So the answer is: No, you can't cancel this Upgrade.
Just discovered this, too:
Important: this rule applies to non-Fortress units only
on or after Turn 17 (see 7.3); prior to that, all other Soviet
units have only one step.
Even the flipping of regional units to the "Fortress" side is no "Improvement":
[7.5] Fortress Conversion
It is also during his friendly Flip Step that the Soviet player
may convert (flip) his one-step Regional infantry units into
a two-step Fortified infantry units regardless of their supply
status, at a cost of one card discard. There is no reward
or penalty for this reversion.