Education financing
Inadequate financing for education threatens global sustainable development, as global public spending on education is woefully inadequate to address the education crisis. An urgent paradigm shift is needed to prioritize and increase investments in education, teaching, and learning, and to ensure a more equal distribution of resources for education.
An annual financing gap of US$97 billion exists for low- and lower-middle-income countries to reach Sustainable Development Goal 4 (SDG4) by 2030.
A staggering US$1.1 trillion revenue could be lost annually by governments due to early school leavers, and US$3.3 trillion forfeited for children lacking basic skills.
An alarming US$21 trillion —equal to 17% of global GDP could be lost in lifetime earnings for students due to rising education inequities, learning poverty and loss of learning.
Low-income countries spend just US$55 per learner annually, compared to US$8,532 in high-income countries.
Government debt in low-income countries averages 72% of GDP. Many of these countries spend more on debt servicing annually than on education.
Education financing at stake
The 2030 SDG Agenda is severely off track: only 17% of SDG targets are on track of being achieved by 2030, with SDG 4 (inclusive and equitable quality education) particularly lagging behind. There is a crisis of quality, relevance, equity and inclusion in education: In 2023, more than 250 million children and young people were out of school. In low- and lower-middle-income countries, 70% of children cannot read a simple text by age 10, and in the poorest countries, this figure is as high as 90%.
At the core of this education crisis is a global financing gap, which is detrimental to adequate and equitable funding of public education policies worldwide. As a result, the advancement of all SDGs is further derailed.
Inadequate financing for education threatens sustainable development
Investment in education remains alarmingly insufficient, with a funding gap of US$97 billion annually looming for low- and lower-middle-income countries to achieve Sustainable Development Goal 4 (SDG4) by 2030. Disparities are stark, as low-income countries spend merely US$55 per learner each year, in contrast to US$8,532 in high-income countries. Moreover, government debt in low-income countries averages 72% of GDP, with many spending more on debt servicing annually than on education.
The cost of inactionÂ
Failure to act can have devastating financial repercussions. Governments could face a staggering US$1.1 trillion loss each year due to early school leavers and an additional US$3.3 trillion forfeited because children lack basic skills. An alarming potential loss of US$21 trillion—equivalent to 17% of global GDP—could occur in lifetime earnings for students due to escalating education inequities, learning poverty, and loss of learning opportunities.
Education is a transformative investment – not a cost
Education is the cornerstone for achieving all SDGs and serves as a catalyst for climate action. Investing in education has immense long-term rewards. Since 1980, education has contributed to a 40% reduction in extreme poverty. Each dollar spent on education can yield an average GDP increase of US$20. Educated individuals typically earn higher wages, with every additional year of schooling raising annual earnings by 9%. Furthermore, societies with robust educational participation, especially among women, tend to experience greater political stability and less conflict. Bridging gender gaps in education and employment for women and girls could potentially increase GDP by 23%. Additionally, achieving full secondary education for all by 2030 could prevent over 200,000 disaster-related deaths in the coming two decades.
Education is a transformative investment – not a cost
Education has helped reduce extreme poverty by 40% since 1980.
Every US$1 spent on education increases GDP on average by US$20. Educated individuals earn higher wages, with each additional year of schooling increasing annual earnings by 9%.
Societies with high educational participation, especially among women, experience lower political instability and conflict.
Closing gender gaps in education and the workforce for women and girls could boost GDP by 23%.
Achieving full secondary education for all by 2030 could prevent over 200,000 disaster-related deaths in the next two decades.
Sustainable financing for education can and must be accelerated
Prioritizing education as a long-term investment will not only accelerate progress towards achieving the SDG 2030 targets for education but will also be foundational in driving progress towards all other Sustainable Development Goals.
Mobilizing sufficient resources (both domestically and internationally) and prioritizing investing in education systems is pivotal in advancing progress in global development. A renewed global financing framework is essential to address cross-cutting development priorities and to ensure adequate financing for essential public services, guaranteeing equal access to quality education.
Closing the financing gap for SDG 4
The Transforming Education Summit (TES) was convened by the United Nations Secretary-General in 2022 to respond to the education crisis on three fronts — equity, quality and relevance — the lack of inclusion and equity, quality, and relevance — that severely impacts learners, and to renew commitments to achieving SDG4.
To follow-up on the Transforming Education Summit to advance with SDG 4, a call to action on educational investment was released urging all countries and all partners to take more concrete action both nationally and internationally to invest more, more equitably and more efficiently in education.
Additionally, and in 2024, UNESCO organized events to foster discussions on education funding. Notable gatherings included the TES Stock Take Event, featuring a panel of education and finance ministers discussing innovative financing methods, and the Global Education Meeting in October-November, and its outcome document the Fortaleza Declaration, which addressed issues like domestic revenue mobilization and the efficiency of education spending.
SDG4 High-Level Steering Committee in action
As the apex governing body of the Global Education Cooperation Mechanism (GCM) which is the global multi-stakeholder mechanism for education in the 2030 Agenda, the High-Level Steering Committee (HLSC) is leading the follow-up on TES, notably by driving financing mobilization and improving alignment.
The aim is to support the coordination of global and domestic actors towards mobilizing greater and more diversified levels of equitable and efficient financing to education, aimed at achieving impact at country level.
With support of the HLSC Inter-Agency Secretariat, HLSC’s work on financing education is guided by a Technical Committee, composed of members of the HLSC represented at technical level. The Technical Committee works on a variety of education financing related issues and initiatives, including on:
Improving multilateral cooperation and alignment to increase efficiencies and scale up funding for education as a global public good and to highlight the need for collective action and investment in education.
Advocacy for mobilizing more funding from both domestic and international sources, aimed at widening fiscal space of countries to allow adequate investments in education.
Support to building knowledge repositories on education financing, including on best practices, (innovative) financing mechanisms and tools, national and international commitments on education finance, education finance strategies and policy development,
Tackling the education crisis from the financial side of the equation requires aligned international cooperation and strengthening of country-led strategic planning and financing processes, which are pivotal to effectively closing the financial and resource gaps that exist in education.
#FundEducation
With only five years to the 2030 deadline, the 2025 Fourth International Conference on Financing for Development represents a vital opportunity to address the financing gap to achieve the Sustainable Development Goal 4 (quality education). In this brief, the SDG4 High-Level Steering Committee makes case for investment in education and recommends concrete actions for governments and the international community.
Key resources
Check the dashboard of national commitments and country actions to discover which countries have committed to address financing of education, and which countries are undertaking concrete actions to invest more, invest more equitably, and invest more efficiently in education.
