Beyond Busan 2: Should imputed student costs and scholarships be counted as aid?

By Elise Legault, research officer, Education for All Global Monitoring Report team

Aid analyses by the Education for All Global Monitoring Report tend to put greater emphasis on basic education than on the whole sector. One reason is that the Education for All and Millennium Development Goal movements have focused on increasing access to basic education. But another is that figures on total aid to education are misleading because they include large amounts about which we know little – and that often do not cross donor countries’ borders. As  2,000 aid policy makers gather at the 4th High Level Forum on Aid Effectiveness in Busan, South Korea, it’s worth assessing what this money buys – and whether it might be spent more effectively.

Aid to post-secondary education makes up 40% of all aid to education, as we note in a new Policy Paper, but it is a melting pot of different types of items, many not spent in developing countries.  In 2009, 39% of aid to post-secondary education was made up of “imputed student costs,” meaning that around US$2 billion a year in “aid” is spent in donor countries to pay for the costs of students from developing countries. The vast majority of this sum is spent in France and Germany. Much of the remainder is also effectively spent in donor countries through scholarships, although the exact amount is unknown since the OECD Development Assistance Committee (DAC) reporting system does not require donors to specify what is spent on scholarships.

For example, Japan provides almost no project descriptions for its aid to post-secondary education in the DAC’s Creditor Reporting System (CRS) database. To know how much is spent on scholarships we must chase reports from Japan’s aid agency, JICA; we estimate that over 60% of their aid to post-secondary education is made of scholarships for study in Japan. The United Kingdom spends about 18% of its aid to post-secondary education on scholarships, and Australia 29%. Results for most other donors are similar, though these figures are probably underestimations because of opaque reporting.

The lack of transparency in aid to post-secondary education makes it hard to hold donors accountable for large shares of their aid to education. But we can also question the effectiveness of spending money on imputed student costs and scholarships, compared with what the same money could buy if it were spent in developing countries.

The United Kingdom spent about £32 million on Chevening scholarships in 2007-2008 on 1,370 scholars, or about US$37,000 per student. Japan spends US$20,000-$25,000 a year per student on stipends for higher education. Although scholarships are administered in the UK by the Foreign Office and in Japan by the Ministry of Education, Culture, Sports, Science and Technology, they are nonetheless reported by both governments as official development assistance.

The annual cost of educating one post-secondary student in Kenya is $788, or $129 for a secondary school student. So for every Kenyan student who is invited to a donor country through a scholarship, up to 50 young people could have access if the funds were spent in Kenya.

This is admittedly a bit of a simplification, as the quality of education is greater in the United Kingdom than in Kenya, so it costs more. And allowing students from developing countries to go to rich countries to benefit from better higher education opportunities is a good thing. But should it be counted as aid? If so (as is currently the case), then it should be subject to the same aid effectiveness assessment as other forms of aid – and scholarships and imputed student costs fail on almost all measures. Since they require recipients to study in donor countries, it is 100% “tied aid” – aid that must be spent in the donor country. The level of developing country “ownership” is arguably nil, and as illustrated above it does not provide particularly good value for money.

Could aid for post-secondary education be better spent? Yes, if it were used to increase the capacity of higher education institutions in developing countries to deliver good quality courses and degrees. Such programmes exist, such as the Netherlands Initiative for Capacity Development in Higher Education. But unfortunately they are few and far between, and the sums involved are dwarfed by the billions spent each year on foreign students in donor countries.


This is the second of three blog posts from the EFA Global Monitoring Report team turning the spotlight on education aid in the run-up to the 4th High Level Forum on Aid Effectiveness.

Beyond Busan 1: Will “new partnerships” with BRICs and the private sector help get all children into school?

Beyond Busan 2: Should imputed student costs and scholarships be counted as aid?

Beyond Busan 3: What kind of management, for which results?





  1. Dear Elise, thank you for sharing these important – and worrying – insights. Another worrying sign is that Sweden has decided to increase its focus on scholarships for students from developing countries who want to study at universities in Sweden. The 2012 government bill includes an increase of such scholarships from SEK 30 million to SEK 50 million annually, implying a 67% increase. Considering the very high cost per student, it’s a mystery how the Swedish government can see this as good value for aid money.

    More broadly, one good thing with the value for money debate is that it triggers us to think where aid money for education can achieve the most. And to focus more on the costs of education! In the coming years, I hope the GMR and other fora will intensify its efforts on collecting and publishing better financing data. This would, among other things, make it easier to examine the cost effectiveness of different aid efforts. We need to move beyond answering the question ‘is aid to education working’? – often answered by donors and the GMR by highlighting different nice aid stories – to the much more interesting question of how more could be achieved with the aid funds that are already there.

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