Financing education

Education financing is a political and social decision-making process through which public revenues and other resources are collected and allocated to finance education and lifelong learning opportunities. It is concerned with translating public and governmental visions and goals for education and lifelong learning into financing sources, amounts and ways of financing schools and educational institutions. Financing entails governance and public sector systems, legal frameworks, policies, mechanisms and administrative structures. It also requires governments to regulate, distribute and allocate those resources, for example, directly to schools and educational institutions, sub-regional governments or authorities, levels and types of education. Moreover, the distribution of these resources to different geographical areas, specific populations or groups profoundly affects the equality of educational opportunities

Education is delivered in both public and private institutions. However, public investment in education is important because:

• Education is a global common good; it has direct and indirect benefits for individuals, their families, economies, societies and the planet. Moreover, the benefits of lifelong learning are inter-generational – they reach the present generation without jeopardizing future generations.
• Education and learning are associated with other human rights and freedoms. From a human rights-based approach, States have the obligation and responsibility to guarantee the realization of the right to education. Free education reduces the cost of school and removes barriers to further education and a prosperous youth and adult life.

Securing these benefits requires commitment and long-term and predictable financing from governments to collect public revenues and mobilize and regulate funding to provide education. Unfortunately, many countries face financing gaps that can affect a whole generation of children, youth and adults.

The financing of education is generally challenging. In many countries, there is a need to increase spending, particularly to achieve national education goals while there is also a growing demand to use limited resources efficiently and in ways that contribute to improving equity.

The need for global action on financing was agreed upon at the highest political level in 2015 when the Education 2030 Agenda urged countries to adhere to international and regional benchmarks of at least 4 to 6% of gross domestic product and/or 15 to 20% of public expenditures allocated to education. Donors also agreed to dedicate 0.7% of their income to financially assist other countries. Other areas of policy discussion and action include changes in domestic taxation, innovative financing, the role of employers and philanthropy in supporting public education.

UNESCO's global action on education financing aims to strengthen the resilience, quality and equity of education systems and better deliver on the SDG 4/Education 2030 financing commitments. It does so by:

• Acting as a laboratory of ideas and developing research/knowledge pieces, guidelines and tools on financing education and lifelong learning, including early childhood care and education, adult education and learning, and digital learning.
• Fostering global policy dialogues, exchange of experiences and peer learning around education financing issues.

Countries have implemented alternative policies and reform pathways to improve their education systems and boost learning. However, results often fall short of expectations for many reasons; chief among them is the lack of appropriately planned funding to ensure full implementation.

UNESCO supports national and subnational education authorities in translating an education and lifelong learning vision into a reality. It offers technical assistance and capacity development on education financing issues, such as:

• Analyzing and reviewing education sector and sub-sector financing frameworks, policies and practices, including the coordination and integration of financing across sectors and sub-sectors.
• Monitoring and reviewing expenditures in education, including early childhood care and education, adult education/learning and digital learning.
• Coordinating and integrating the education budgets into sectoral and cross-sectorial financing frameworks.
• Elaborating resources projections, cost simulations and financing scenarios for developing self-sustaining national education sector plans and policies, including mobilizing alternative domestic and external resources.
• Evaluating the implementation of education financing policies.

Making an education vision a reality is a complicated process and requires substantial human and financial resources. What happens if we want to ensure free pre-school education for all? Or lower secondary education to become free and compulsory? Or raise teachers’ salaries to make teaching more attractive? These are just some of the questions to be answered when a country develops its education sector policies and plans. Without feasibility testing, countries face the risk of underfunding which leads to under or no implementation of policies and programmes. UNESCO provides direct technical support and capacity development to countries to undertake costing exercises and has also developed generic Excel-based simulation models (SimuED) that can be downloaded and used by country experts. 

UNESCO advocates for data-informed policy and decision-making in education. In educational planning, data can help ground policy and programme strategies and priorities in the economic and demographic realities of a country making them more likely to be realized. To help countries estimate the resources associated with implementation of their Education Policy and Strategy (ESP), in 2001 UNESCO developed the Education Policy and Strategy Simulation (EPSSim) model which has since been used in dozens of countries around the world.

To meet new education contexts and challenges and the targets of SDG4, in 2019 UNESCO launched the Simulation for Education (SimuED) model which is Excel-based and covers every sub-sector in education. Unlike other generic education simulation models, SimuED’s structure allows users to select the most relevant elements and projection techniques depending on their country needs and data availability. The process simplifies the model development process reducing the time needed to use it. SimuED also allows users to easily create and compare different scenarios to facilitate prioritization and decision-making.

• To download SimuED, or access resources such as the samples and the video tutorials, please send an email to SimuED@unesco.org.