We stand at a development crossroads. The positive spillovers of investing in education are undeniable, yet steep funding declines now threaten the global development trajectory.

An interplay of factors has put pressure on education financing over the last decade. They include a burgeoning school population and an escalating debt crisis. In fact, 2.1 billion people now live in countries that spend more on debt servicing than they do on education. 

Meanwhile, foreign direct investment to developing economies fell to its lowest level since 2005. The situation is exacerbated by the declining priority of education within official development assistance. As a result, global aid for education is expected to fall by one-quarter by 2027. This could halve education budgets in some low-income countries.

We must maintain education momentum at all costs. Education is a foundational infrastructure for all development. Scaling back on education spending, especially for the lowest-income countries, would be tantamount to putting the brakes on our future and that of our children.

Driving economic growth and social progress

Since 1980, investment in education has contributed to 50% of global economic growth, 70% of income gains among the world’s poorest quintile, and 40% of extreme poverty reduction. It accounts for more than 40% of reduced gender income gaps in all regions.

Education underpins peace, health, job creation, stable markets, and resilient supply chains. For the global south, inclusive and quality education could transform demographic advantages and resource wealth into innovation and shared prosperity.

A business venture that promises so many dividends would be oversubscribed. Why then do we continue to define education as a cost rather than the smart investment that it is? 

Around the world, over 250 million children are out of school. If current trends continue, fewer than 10% of young people in low-income countries will achieve basic secondary-level skills by 2030. UNESCO estimates that these education deficits will cost the global economy about $10 trillion a year.

An opportunity to radically transform education 

We should not waste the crisis of recent aid cuts. Let us seize it as an opportunity to reclaim the promise of education, demonstrate the unsurpassed value of education investment, make a quantum leap in delivering effectiveness and impact, and establish new funding and delivery coalitions.

What does this mean in practical terms?   

It means strong, renewed, and sustained political commitment at the highest level. Governments need to be passionate and relentless to drive education reforms, maintain a sharp focus on learning outcomes and inclusion, prioritize education as a core investment, and allocate adequate resources. Strong political commitment drove major education expansion for low-income countries in the ’60s and ’70s, and it can drive qualitative improvements today. 

India shows what is possible despite deeply entrenched challenges such as inequalities across regions and states. The Annual Status of Education Report 2024, India’s nationwide survey of children’s foundational reading and math skills, demonstrated that numeracy improved nationally by 5.6%, while Uttar Pradesh state improved reading levels by 15 percentage points. Achieving these results took more than 10 years of sustained political commitment, advocacy and coalition building, domestic funding, and targeted external support.

We have the knowledge and tools to make India’s success story the norm rather than the exception.

Sustained education reform happens when education researchers, policymakers, and implementers work together. CAMFED, also known as the Campaign for Female Education, shows how reforms grounded in local evidence and multisectoral partnerships can deliver gender inclusion.

A joint effort in reclaiming the promise of education

Addressing fragmentation and lack of coordination in donor funding would maximize the impact of development finance. The Global Partnership for Education does this by aligning all stakeholders to support partner countries to transform their education systems.

Innovative financing approaches adopted by GPE and the International Finance Facility for Education, or IFFEd, are also proving effective in crowding in additional funding.

Given the funding constraints, we need to be smart about how we manage resources, targeting them toward equity and inclusion and getting more out of every investment by linking funding to results and radically improving transparency.

Finally, to reclaim the promise of education, we need to forge new partnerships.

Philanthropy and the private sector are catalysts for innovation in education. The Yidan Prize Foundation has strengthened global thought leadership in education and promoted breakthroughs in teaching, learning, and education technology, some of which are mentioned above.

Similarly, the Equity Group Foundation reinvests a portion of its capital to provide secondary schooling, university scholarships, as well as training and employment opportunities. For Yidan Prize Foundation and Equity Group Foundation, it is not more of the same but the same delivered differently and more potently. Civil society organizations and local think tanks also play a critical role in driving accountability in education.

The development landscape is changing in a fundamental way, and so must the education sector.

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Photo credit: Andrew Ebrahim on Unsplash

This article originally appeared on Devex 29 August 2025. No endorsement by Devex is implied.