A growing debt burden and declining international aid are forcing many developing nations to allocate more money to repaying foreign loans than to educating their children, according to a new report released by UNESCO. The findings have raised concerns about the long-term impact on global education and sustainable development, with experts warning that millions of children could be deprived of quality learning opportunities if the trend continues.
The report reveals that 113 developing countries spent more on servicing external debt than on education in 2025. In many of the world’s poorest nations, debt repayments have become one of the largest items in government budgets, leaving limited financial resources for schools, teachers, infrastructure and educational programmes. The situation is particularly severe in sub-Saharan Africa, where governments collectively spent nearly 3.6 times more on debt repayments than on education.
According to UNESCO, the crisis has been aggravated by a steady decline in international development assistance. Global aid directed towards education has fallen by around 21 per cent since 2023, and projections indicate that it could decline by as much as 30 per cent by 2027. Several low-income countries, including Afghanistan, Liberia, Mali and Niger, have already experienced education aid cuts exceeding 40 per cent, placing additional pressure on already fragile education systems.
The report warns that many governments are trapped in a cycle where rising debt obligations force spending cuts in essential public services. Instead of investing in classrooms, teacher recruitment and educational reforms, countries are compelled to prioritise loan repayments to international creditors. This has resulted in school closures, shortages of teaching staff, delayed infrastructure projects and reduced access to education for millions of children.
The financial imbalance is even more pronounced among the world’s most indebted countries. UNESCO noted that in 18 heavily indebted nations, governments spent at least five times more on debt servicing than on education. Sri Lanka was identified as one of the most extreme examples, where debt repayments reportedly exceeded education spending by up to sixteen times. Debt advocacy groups have also pointed out that repayments by poorer countries reached their highest level in 35 years during 2025, leaving governments with little fiscal flexibility to support social sectors.
Education experts have cautioned that continued underinvestment could undermine global efforts to achieve quality education for all by 2030 under the United Nations Sustainable Development Goals. Reduced funding not only affects classroom learning but also limits teacher training, school maintenance, digital education initiatives and programmes aimed at increasing enrolment among disadvantaged communities.
In response to the growing crisis, UNESCO has urged governments, multilateral institutions and private creditors to adopt long-term debt relief measures instead of relying solely on temporary financial assistance. The agency has also advocated expanding the use of debt-for-education swaps, a financing mechanism through which countries can redirect a portion of debt repayments towards strengthening their education systems. Successful examples of such arrangements have already been implemented in countries including Côte d’Ivoire and Peru, demonstrating that innovative financing can help improve educational investment without increasing fiscal pressure.
The organisation further called on major economies and international financial institutions to reform existing debt resolution mechanisms so that private lenders do not obstruct debt relief agreements. UNESCO believes that easing debt burdens while restoring education funding is essential for preventing further learning losses and ensuring that developing nations can invest in the skills and human capital needed for long-term economic growth.
The report concludes that unless urgent action is taken to address rising debt and shrinking aid, developing countries may continue sacrificing education spending to meet financial obligations, putting the future of millions of children at risk and widening global inequalities for years to come.
