As education funding crumbles, the sector must ‘get its house in order’

Budget cuts in Washington, London, and beyond mean students across the world are at risk of losing access to their classrooms. Since the Trump administration’s January dismantling of USAID, the world’s largest bilateral donor to the education sector, delivery partners have had to cancel 396 education programs in 58 countries. This was followed by the shocking news that another traditional education-backer, the U.K.’s Foreign, Commonwealth & Development Office, is set to deprioritize education within its own dramatic budget cuts. Although the knee-jerk reaction to these cuts has been to ask the question “who will step up to fill this funding gap,” education experts are clear-eyed about not expecting financial rescue under the current system — instead, the sector must overhaul the way it presents itself and seek innovative financing mechanisms to survive. “The way of financing aid, development, and humanitarian support is going to change,” Nasser Al-Faqih, chief of partnerships at Education Cannot Wait, or ECW — the U.N.’s fund for education in emergencies — told Devex over the phone. “The clear message we’re hearing is partners [in the education] sector have to figure out a different way of working in the future. It’s a call for reform.” Scale of funding cuts Between 2010 and 2022, USAID provided more than $1 billion annually for primary, vocational, and higher education worldwide, according to UNESCO. In the 2024 fiscal year, its contribution was just shy of $1 billion for international basic education programs. The U.S. was also the largest single donor to UNICEF, the U.N. agency dedicated to protecting children’s rights, including their right to education. In 2023, it contributed $1.4 billion to UNICEF’s overall work — the ripple effects of the 2025 U.S. cuts are that the agency expects a 20% reduction in overall sources of income in 2026. UNICEF is currently conducting an analysis of the impact global funding cuts will have on education. But in the meantime, it has closed some programs, according to a press release issued last week. In Bangladesh, UNICEF has temporarily closed some learning facilities for up to 230,000 Rohingya refugee children, reduced the curriculum teachers delivered, canceled end-of-year assessments, and will soon close support for some 1,200 volunteer teachers. USAID, as previously reported by Devex, was meant to contribute about $1.3 billion from 2013 to 2026 to the Global Partnership for Education, which focuses on providing education in lower-income countries. This is hosted by the World Bank’s International Bank for Reconstruction and Development. Over $900 million of that had already been committed, but the remainder is in jeopardy. USAID was also a major contributor to ECW, another multilateral initiative. According to Giulia McPherson, the U.S. executive director for the civil-society platform the Global Campaign for Education, no other entity, be it the private sector, philanthropy, or national governments, is “poised to take a prominent role” in funding education. “We have seen a progressive decline in support for education programs … in recent years,” she stated in an email to Devex. “Not only is there no alternative to U.S. funding for these lifesaving programs, but the U.S. departure has left a gap in leadership that few can fill.” Across the pond in the U.K., the situation is similar. In 2024-25, the country’s official development assistance, or ODA, allocation to education was over £499 million ($673 million) via FCDO’s education, gender, and equality programs. Yet in May, the U.K.’s development minister Jenny Chapman stated FCDO would deprioritize education and gender in future ODA allocations, which are set to be published in the summer. This follows the overall announcement of the slashing of the U.K. aid budget to 0.3% of gross national income. Other European countries have also reduced their education aid budgets or shifted priorities elsewhere, including Switzerland, Germany, and France. The European Union has pledged to spend more than €6 billion ($6.8 billion) on global education between 2021 to 2027. When asked for comment on whether the EU could fill the gap left by other funders’ withdrawal, a European Commission spokesperson stated: “The EU cannot fill this gap left by others.” Like McPherson in the U.S., U.K.-based Joseph Nhan-O'Reilly is pessimistic about future education funding. “There's no one lining up to support education to the extent that the U.S. or the U.K. did,” said Nhan-O'Reilly, who is the executive director of the International Parliamentary Network for Education. There have been small signs of countries trying to step up funding. Ireland increased its contribution to the World Bank’s International Development Association by more than a third this year — to €141.4 million. One of the areas the IDA supports is access to primary education. Last month, Japan invested $1.45 million in a finance mechanism operated by GPE to support education in Madagascar. But Nhan-O'Reilly said these were tiny amounts compared to what has been lost. “Ireland is a minnow, in terms of its development spend, even if it doubled its spending in education,” he said. The World Bank declined to comment for this article on its future global education funding, as did UNESCO. However, UNESCO is set to publish a report on international aid for education on June 20. A change in how the sector presents itself and in the financing it seeks ECW’s Al-Faqih believes the global education sector needs to stop seeing itself as a recipient of charitable grants to deliver its work, and reposition itself as innovative in its delivery and financing. “Either we fight within our own paradigm for more charity money, or we say this [the cuts] is an opportunity to create a more equitable model that advances the dignity of people,” he said. Al-Faqih told Devex ECW faces a shortage of resources amounting to about $150 million for its work until the end of 2026. This was in part caused by USAID, but also because it has been unable to “finalize commitments with other donors,” whom he could not name. While ECW could introduce typical short-term budget efficiencies, such as staff restructuring or cutting travel expenses, Al-Faqih believes this would not be enough to solve financing issues in the long term. Instead, he said organizations such as ECW that are mainly funded by governments, rather than private donors, need to start speaking differently about what they do. This includes moving away from charity-based models of funding toward investment and co-responsibility models. “Governments have a desire to promote something like education as an investable area, something where investment is worthwhile because it's critical for peace-building and stability … the same reasons why they need to increase, for example, funding for better armaments and becoming more militarily secure,” he said. “It's not charity, it's part of what they do for their future peace of mind and stability and economic prosperity.” Al-Faqih suggested future education funding would not be typical grants, but investments in innovative finance models — such as debt swaps. The World Bank Group, jointly with the International Monetary Fund, recently set up a debt-for-development swap operation in Côte d’Ivoire. It reported that this released €330 million in liquidity over the next five years to improve debt sustainability and provide investment in education. Philanthropy can still step up While philanthropic foundations alone will not be able to fill the education funding gap, some are stumping up more money. Laura Savage, the executive director of the largest global network of philanthropic groups funding education, the International Education Funders Group, told Devex that two philanthropic organizations in particular are being proactive in funding global education. At the World Bank’s Spring Meetings in April, the Gates Foundation launched an expanded global education strategy. The fund increased its commitment to foundational learning from $22 million annually in its previous strategy to $240 million over the next four years. The other philanthropy body making inroads in the global education space is Prevail Fund, which aims to raise and spend $1 billion in philanthropy over 13 years in Africa and South Asia to support partnerships between local organizations delivering education, and their countries' governments. “Some of the [philanthropic] foundations are very active in … trying to defend investment in education and aid in general,” Savage said. She wants to see more of this and is rallying her members to advocate for the importance of education. ‘Education needs to get its house in order’ At the same time, Savage believes education providers need to hone their attention on what actually works and is worth the investment. “Education has traditionally been a space where some bits fight others: Foundational learning is more important than social, personal and emotional learning [for example], or personal development is more important than foundational learning,” she said. “Education needs to get its house in order.” Another issue is that too many organizations are currently trying to carry on delivery as usual, only with less money, according to Savage. Instead, she urged those in the education space to focus more on evidence and change what they are doing. She suggested that initiatives such as the What Works Hub For Global Education — a collaboration of more than 40 members with partners including FCDO and the Gates Foundation that aims to examine how governments can implement effective education reforms at scale — can help the sector agree on what to focus on. Savage, like Al-Faqih, believes education organizations should be considering the role of business and impact investment. For her, impact investors are an active, “interesting group” that can convince high net worth individuals and businesses to invest. She also highlighted that middle-income businesses might be convinced to invest in education, to create a talent pipeline of people they can hire in the future. One example is the Philippine Business for Education, a coalition of business leaders investing in delivering educational programs in the Philippines. Not giving up Despite widespread acceptance of the new funding climate, some education development professionals have not given up hope that the U.S. and British governments, and others who are pulling back on funding now, might return in the future. “We will continue to make the case to our policymakers here in the U.S. as to why investing in education is key to our own national security and the stability of our nation,” McPherson said.