German activities

Developing new approaches in education finance

Under the banner of innovative education finance, the international community is currently debating which approaches can be used to generate additional resources for achieving education goals. A high-level international commission was appointed in 2015 to look into the options. Ideas range from establishing a new fund with low-cost loans for investments in education via new social financing instruments (education bonds and impact investing) to results-based financing, which has the aim of increasing efficiency. Germany's experience as regards new approaches in education finance has so far mainly involved the following aspects:

  • debt-for-education swaps,
  • stronger involvement of the private sector in vocational education and training, and
  • piloting demand-driven financing instruments by providing study loans and scholarships for disadvantaged population groups.

Furthermore, in future more results-based financing will be used for German development cooperation activities. This means that additional funds will only be disbursed once predetermined goals have been achieved.

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