Developing countries spend more on debt repayments than on education, UN says

The situation could become even more difficult due to cuts in international aid. Low- and lower-middle-income countries have already lost 21% of education funding compared to 2023. According to forecasts, by 2027 aid volumes could be reduced by 30%. Some countries, including Afghanistan, Mali, Niger and Liberia, have seen funding drop by more than 40% in three years.

UNESCO warns that the current system is driving states into a vicious circle of savings and insufficient funding. Reduced investment in education impedes economic development, reduces the ability of states to increase their own revenues and, as a result, makes it even more difficult to pay off debts. In the 18 countries with the most severe debt problems, loan servicing costs were five times higher than education costs. In Sri Lanka, the gap reached sixteen times the size.

According to the British organization Debt Justice, last year payments on the debts of the poorest countries reached their highest level in 35 years. In 56 countries, nearly a fifth of all government revenue was spent on loan servicing. The increase in debt burden was the result of several crises at once: the coronavirus pandemic, rising energy prices and interest rates, as well as climate disasters. In the hardest-hit countries, pressure to pay off debt is cutting funding for critical public services, including health and education.

The problem is aggravated by cuts in aid from the United States and European countries. International education funding fell by $600 million in 2024, and is expected to fall even further in 2025. The combination of rising debt payments and decreasing international aid is already affecting the performance of educational systems. Schools lack funds for daily operations, and teachers in some countries face delayed or missing salaries.

Experts fear that in the long term, underfunding of education will only worsen economic problems. Weak education systems limit countries’ ability to develop their economies and train skilled professionals, which in turn makes it difficult to combat the debt crisis. UNESCO calls for a change in the current approach to debt restructuring. Instead of short-term measures, the organization proposes creating long-term mechanisms that would allow states to simultaneously reduce their debt burden and continue to finance education and other public services.