PARIS - UNESCO has urged governments and international lenders to broaden the use of debt-for-education swaps to ease a worsening shortfall in funds for schooling, saying a growing number of countries are allocating more of their budgets to debt servicing than to education.
The U.N. Educational, Scientific and Cultural Organization unveiled new guidance on the use of debt swaps at a global education summit in Paris on Friday, arguing the mechanism can help heavily indebted countries redirect money towards schools, teacher training and student support.
Debt-for-education swaps work by enabling countries to refinance or repurchase costly liabilities and channel the resulting savings into education budgets. UNESCO noted that the World Bank has recently begun supporting these arrangements. The agency also highlighted bilateral examples, including a 2023 agreement with France that assisted Ivory Coast in financing the construction of more than 30 schools, and a Spain-Peru programme that funded 50 education projects over the course of a decade.
UNESCO presented the guidance amid fresh research pointing to mounting pressure on education finances worldwide. According to the agency, 113 countries - collectively home to 6.1 billion people - now spend more on debt servicing than on educating their populations. The imbalance is particularly acute in low-income countries, where debt payments are nearly four times higher than education spending. In 18 of the most heavily indebted countries, debt servicing exceeds education budgets by at least fivefold.
The agency also warned of declining international support for education. Its Global Education Monitoring Report projects that global aid to education could fall by as much as 30% between 2023 and 2027. UNESCO reported that aid to education fell 8% in 2024 from the previous year, with funding for basic education down 15%.
UNESCO highlighted that low- and lower-middle-income countries have already lost 21% of the education aid they received in 2023, citing particularly steep reductions in Afghanistan, Liberia, Mali and Niger, which have seen declines of more than 40%.
The share of education within total development assistance fell to 7.5% in 2024, the lowest proportion recorded in two decades, UNESCO said. The agency estimated that low- and lower-middle-income countries face an annual education financing gap of $97 billion.
"Education is the most powerful investment countries can make, yet it is being systematically underfunded," UNESCO Director-General Khaled El-Enany said, calling for greater political support to scale up innovative financing tools.
The findings were presented at the Transforming Education Summit+4, which has brought together ministers, development banks and international organisations to review progress toward the U.N. goal of ensuring inclusive and equitable quality education for all by 2030.
Context and implications
UNESCO's guidance promotes debt-for-education swaps as a tool for governments and creditors to consider when aiming to preserve or expand education spending without increasing overall fiscal burdens. The agency pointed to existing examples where bilateral agreements or support from multilateral institutions have translated into concrete school construction and project funding.
At the summit, the emphasis was on translating the guidance into broader and faster adoption, particularly for countries where debt servicing consumes an outsized share of public resources and where cuts to education aid have already been sharp.
What remains unclear
The report outlines options and examples but does not provide details on how widely such swaps can be scaled across different debt structures or the specific terms required in each case. The guidance is presented as a policy tool rather than a guarantee of outcomes.