In February 2025, the US government abruptly terminated 90% of USAID’s foreign aid contracts, and in May proposed cutting the budget to humanitarian and development aid by $11.5 billion or 18%, while increasing military spending by 13 percent to $1.01 trillion. This is part of a broader trend. Before this, Australia, Canada, New Zealand and the United Kingdom had all reduced aid and folded their aid agencies into the administration of foreign policy and international trade. Preliminary data from the OECD indicates that aid was reduced by 7.1% in 2024, and may drop a further 17% in 2025. Aid flows have also been re-orientated to cover the costs of detaining and housing asylum seekers and refugees in donor countries, and preventing migration into donor countries. A large proportion of aid has shifted away from developing countries to supportUkraine, which received $27.8 billion in 2023, or 13.1% of all aid disbursed worldwide. At the same time, donors have deprioritised education, reducing education spending from 7% of aid in 2018 to 5.2% in 2022.

Source: Donor Tracker

It is not yet clear how the rapid decline of aid will affect education in developing countries. More than a third of donor funding is used for scholarships in donor countries, and up to 90% of aid in recipient countries is directed towards for-profit contractors and for-profit edu-businesses headquartered in donor countries. The remaining funds, a fraction of declared aid, have been channelled into girls’ education and schooling for children displaced by conflict and climate crises. It is likely that the rapid decline of education aid, particularly in humanitarian settings, will disproportionately affect refugees, particularly girls. At the same time, developing countries have used humanitarian aid to strengthen and cross-subsidise the provision of public goods for non-refugee populations. The reduction in aid could therefore affect parts of the public education system that are not directly funded by donors. 

While non-traditional donors, such as Saudi Arabia, Turkey, the United Arab Emirates, Qatar, South Korea and China have increased their focus on education in developing countries, it is unclear whether this can offset the decline in education aid from traditional donors. Countries that are dependent on a small number of traditional donors are especially vulnerable, particularly in humanitarian settings. In El Savador and South Sudan, for example, the United States accounts for more than 68% of humanitarian aid. Overnight reductions in aid will likely increase the incidence of severe hunger, illness and death, and weaken - perhaps fatally - humanitarian institutions in these countries. 

The end of USAID and its bilateral funding mechanisms is not the end of US aid. The United States International Development Finance Corporation (DFC) remains in operation and will likely continue using aid - in the form of equity and loans - to support the country’s military and commercial objectives. Since the end of USAID could reduce the United States’ soft power, such hard power mechanisms may become more salient. In this respect, the government’s recent budget proposes to increase funds to the DFC by $2.8 billion and establish an American First Opportunity Fund worth $2.9 billion with the explicit aim of countering China. 

All of this is occurring within a tumultuous international landscape. An estimated 54 countries are indebt crisis, having to allocate 15% or more of public revenue to servicing debt. TheIMF has required many of these countries to reduce their public sector wage bill, which typically includes substantial cuts to public education and healthcare. More than 40% of the world’s population, about 3.3 billion people, live in countries where governments spend more on debt interest payments than on health or education. Aid has contributed to this debt crisis: in 2022, 36% of aid was provided in the form of loans rather than grants. 

Source: UNCTAD

Much of the decline in aid has been driven by a sharp fall in donor contributions to the core budgets of multilateral organisations, such as UNESCO and the WHO, leaving them increasingly vulnerable to special interest capture. This could weaken their capacity to function as institutions that are democratically accountable to all member states, and erode their capacity to enact policies that are informed by a commitment to human rights and the lived realities of the most vulnerable in our world. These pressures on multilateralism and international law, coupled with the ongoing reorientation of global trade, could potentially further erode public finances and reduce investment in public goods, especially in education. Doing so may weaken social contracts and catalyse social unrest domestically, while narrowing the scope for countries to engage in democratic cooperation in the international arena. As a warning of what might be in store, the economic shocks during the Covid pandemic have already been accompanied by increasing authoritarianism and conflict.

At the same time, the sharp decline in aid may inadvertently reduce some drivers of destabilisation and conflict. Aid has sometimes been used to harm people in developing countries. Donors have funded forced sterilisation in India and violent land dispossession in Ethiopia. They have used aid to extend and militarise European borders deep into Africa and to wage a war on drugs in Latin America. In some cases, aid has been used to ferment regime change and prop up dictatorships. The reduction in aid could potentially reduce the scope for donors and international NGOs to operate with what the UN humanitarian coordinator for Somalia describes as “humanitarian impunity.”

Such impunity is enabled by a system of aid driven by donor priorities, with little room for multilateral governance or democratic accountability. Nowhere is this clearer than in the ongoing genocides in Palestine and Sudan, during which donor countries have provided considerable military aid to aggressors while insisting they are powerless to stop enforced starvation through the blockade of humanitarian aid and targeted killing of aid workers.

Amidst this, developing countries have also been charting their own path forward. Since the African Union’s groundbreaking 2015 report onillicit financial flows, the Group of 77 developing countries in the United Nations, led by the Africa group, have increasingly pressed for international mechanisms to track and reduce substantial illicit financial flows from the global South to the global North, which are conservatively estimated to equal all international aid. Caribbean countries have organised aroundreparations from colonial powers for crimes against humanity, including genocide and slavery. Many of these countries are also involved in pressure to democratise multilateral institutions including the IMF, World Bank and the UN Security Council, all institutions in which a small number of countries have controlling votes. Latin America and Africa’s main trading partners have shifted towards Asia, and the share of intercontinental trade in both regions has grown. All of this suggests that a complex multipolar world is emerging amid attempts by developing countries to engage in collective action to challenge the underlying causes of their dependency on aid. 

As complexity and uncertainty deepen, it becomes more difficult to sustain definitive pronouncements. The current moment calls on us instead to engage in careful self-reflection and open enquiry. What are the immediate impacts for governments, teachers and students in aid-dependent economies? Who will experience the greatest harms? Which social actors and programmes are emerging to chart a different path forward?How will these contestations reshape education systems? What part can universities play in these unfolding debates and interventions? How has our proximity to power as researchers in the global North influenced our intellectual preoccupations in the past? Confronted with the decline of the aid sector, what opportunities are there for us to think in less-instrumentalised ways about education? What are our responsibilities as intellectuals in the current moment?

There are no easy answers. Seemingly fixed positions have come unmoored. But these uncertainties are also filled with possibility. Our unshakeable certitudes might give way to a recognition of our common fragility, an openness to the future, and the possibilities of human creativity and imagination.

Written by Nimi Hoffman (CIE)