UNESCO calls for exchanging debt for education in light of the decline in educational aid

At the same time, projections indicate that low- and middle-income countries will lose 30 percent of international aid allocated to the education sector between 2023 and 2027. Development aid to education has declined for several years, after the United States dramatically reduced its foreign aid and other countries prioritized debt repayment and military spending.

With external funding for education declining, UNESCO has highlighted debt-for-education swaps as a potential alternative option for developing countries.

Swapping debt for education is a form of debt relief, where the lender forgives part of the state’s debts, in exchange for the borrowing state’s commitment to allocate the same value to internal educational projects. This allows states to protect education spending during periods of financial stress.

UNESCO Director-General Khaled Al-Anani said“Education represents the highest investment a country can make, but it still faces chronic financing shortfalls. Our projections indicate that global aid to education could decline by up to 30% between 2023 and 2027, which threatens to perpetuate the cycle of underinvestment, exacerbate inequalities, and falter development paths. Innovative financing mechanisms already exist, including debt-for-education swaps. Expanding the scope of these solutions depends on renewed political commitment.”

A sharp decline in educational aid

Aid to the education sector decreased by 8 percent between 2023 and 2025, while aid to basic education declined by 15 percent during the same period.

According to the UNESCO report entitled: “Counting the Losses,” issued on Friday, the United States reduced its total foreign aid by 57 percent in 2025, while the European Union reduced it by 14 percent and Japan by 6 percent.

UNESCO explained that a large part of this decline is due to the dismantling of the United States Agency for International Development, in addition to the ongoing repercussions of the pandemic. Covid-19energy price shocks, and the increasing priority given to investments in clean energy.

The report indicated that the countries most affected by the decline in aid include Nicaragua, Vietnam, Afghanistan, Mauritania, and Honduras.

Although trading debt for education may not be appropriate in all contexts, UNESCO confirmed that it has achieved successes in Peru, Egypt and Côte d’Ivoire.

In addition to this type of financing, the organization recommended reducing borrowing costs, strengthening the resilience of educational systems, and increasing domestic spending on education whenever possible.

Education Transformation Summit

The UNESCO report comes in conjunction with a meeting of about 40 global leaders at UNESCO headquarters this week to participate in the work of the Education Transformation Summit +4, which aims to accelerate the pace of work and lay the foundations for more resilient educational systems, ensuring the provision of quality and comprehensive education for every learner.

The meeting coincides with the four-year anniversary of the…United Nations Education Transformation Summit“The year 2022, which mobilized global efforts to raise the issue of education to the forefront of the international political agenda.