The world's poorest children are paying a high price for scholarships

The world's poorest children are paying a high price for scholarships

When donating aid, donor countries should prioritise basic rather than higher education.



For many donor countries, a large proportion of "aid" never leaves their country. Spending this money on education in the world's poorest countries could go a long way to giving the 132 million out-of-school children and adolescents the chance for a better future.

Our recent policy paper, Education for All is affordable - by 2015 and beyond [PDF], shows that the financing gap for achieving basic education has grown by $10 billion in three years and now totals $26 billion per year. This increased finance gap is primarily due to donors failing to increase aid significantly to help developing countries send children to school.

This finance gap can be bridged, however, if both developing countries and donors prioritised basic education. Currently, however, donors spend $3.1 billion per year on university students from poor countries to study in donor countries, equivalent to one quarter of total direct aid to education. This money is spent on scholarships and imputed costs (costs incurred by donor-country institutions when they receive students from developing countries). While higher education is undoubtedly important, allocating aid in this way does little to help the world's poorest and most vulnerable children and young people and does little to fill the finance gap.

The figures speak for themselves: for each scholarship provided for a student to study at a university in a developed country, hundreds of students in a developing country could receive basic education. One single scholarship for a Nepalese student in Japan, for example, could pay for 229 secondary school students in Nepal.

Let's look at the top four donors to education: In 2010, almost 40 percent of Japan's direct aid to education went to scholarships for students studying in Japan; the equivalent for Canada was 22 percent. Germany's aid disbursements to scholarships and imputed student costs were almost eleven times the amount it spent on direct aid to general secondary education and vocational training in 2010. That same year, France's aid disbursements to scholarships and imputed student costs were four times as much as was spent on direct aid to general secondary education and vocational training.

Outside of donor countries, the private sector also often prioritise higher over basic education. Two of the foundations giving the most to education (Carnegie Corporation of New York and Ford Foundation) and the corporation giving the most (Banco Santander) directed over 80 percent of their grants to developing countries in 2010 towards scholarships and support for higher education institutions. While higher education certainly needs more funding, the fact that many poor children and young people do not even complete primary school means that such investment is not sufficiently targeted at the disadvantaged.

Donor countries should prioritise basic education by targeting 20 percent of overall aid to education. If they also allocated half of these funds to basic education, we could raise a total of $14 billion. This would go a long way in reducing the current financing gap for basic education. It will be even more vital to ensure aid reaches those who need it most as we approach the prospect of even more ambitious education goals after 2015.