By Nicole Comforto, EFA Global Monitoring Report

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, shows that we could bridge the $26 billion financing gap if both developing countries and donors prioritized basic education. Currently, donors spend US$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.

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.

In 2010, almost 40% of Japan’s direct aid to education went to scholarships for students studying in Japan; the equivalent for Canada was 22%. 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.

Donor countries should prioritize basic education by targeting 20% of overall aid to education. If they also allocated half of these funds to basic education, we could raise a total of US$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.