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In a stark reflection of the financial struggles faced by many nations, a recent United Nations report reveals that developing countries allocated more funding to debt repayments than to education in 2025. The findings highlight an alarming trend: in sub-Saharan Africa, governments spent a staggering 3.6 times more on servicing loans than on educating their youth, a situation exacerbated by impending cuts in international aid.
The Dire State of Education Funding
According to research conducted by UNESCO, the UN’s educational and cultural agency, 113 developing nations diverted significant resources away from education in order to manage mounting foreign debt. This financial misalignment comes at a time when global educational aid is projected to decline by up to 30% over the next few years, leaving many vulnerable countries in a perilous position.
Min Jeong Kim, director of UNESCO’s education division, emphasised the cyclical nature of this crisis, stating, “Current approaches really keep the countries trapped in a cycle of austerity, underinvestment and stalled development.” The consequences are dire: as nations struggle to meet debt obligations, essential services, including education, are left underfunded.
Exorbitant Debt Repayments
The report highlights that 18 of the most indebted nations are spending five times as much on servicing their debts compared to their educational budgets. Sri Lanka stands out, with debt repayments consuming up to 16 times more than its education expenditure. The picture is equally grim across the globe, where 56 poorer nations allocated nearly 20% of their total revenues to repay loans, the highest level observed in 35 years.
Tim Jones, policy director at Debt Justice, pointed to a disastrous combination of factors leading to this crisis. “Countries’ debt payments have ballooned following a series of shocks from Covid, energy price and interest rate rises, and climate disasters,” he said. The cumulative impact of these pressures has led to severe cuts in spending on vital public services such as health and education.
The Fallout of Aid Cuts
The situation is further compounded by substantial cuts in aid from Western nations, particularly the US and Europe. In 2024 alone, funding for education plummeted by $600 million (£470 million), with expectations of continued decline in subsequent years. Such reductions have led to widespread disruptions in education systems, often resulting in schools lacking the necessary funds to operate effectively and teachers going unpaid.
This troubling trend raises critical questions about the long-term viability of education in heavily indebted countries. Without adequate investment in education, these nations may find it increasingly difficult to foster economic growth and manage their debt burdens in the future.
Rethinking Debt Relief Strategies
UNESCO advocates for a fundamental shift in how debt relief is structured, urging a move away from short-term solutions towards long-term arrangements that support public service funding. Jones highlights the need for reforms in the debt relief process, particularly in ensuring that private lenders, many of whom are based in the UK and the US, do not impede agreements aimed at reducing debt burdens.
“The UK needs to use its presidency of the G20 in 2027 to push for significant changes to the debt-relief process, including more debt cancellation and a faster process,” he asserted. Central to this reform is the incorporation of new measures into English law, preventing private creditors from obstructing progress for their own financial gain.
Why it Matters
The implications of this financial turmoil extend beyond mere numbers; they signal a potential catastrophe for the future of millions of children who are being denied access to quality education. As developing countries grapple with the consequences of unsustainable debt, the ripple effects threaten to hinder economic development and social progress. The urgent need for a re-evaluation of global financial strategies has never been clearer. The world must act decisively to ensure that education does not remain a casualty in the fight against debt.