4 Innovative Financing Models Helping Children Get into School


Education financing seems to the most contentious issue around goal setting for the post-2015 agenda. Last month, at UNESCO’s Education Meeting in Muscat, Oman, global leaders agreed upon targets for who to reach and where, but disagreed on setting hard goals for budget allocation. As Pauline Rose states in her latest blog on the post-2015 agenda, many global leaders are against the setting of financial targets in education for several reasons, from advocating greater use of private sector funds to general fears of commitment. Despite resistance, education targets need to include parameters that hold policymakers accountable for financial commitments that will enable the international community to achieve selected outcomes.

Here at CEI, we believe that innovative financing for education, in addition to strategic financing, is essential if we wish to make progress towards the post-2015 agenda. The following programs from the CEI database have unique financing models that allow them to reach the most vulnerable students in Latin America, Asia, and Sub-Saharan Africa.

1. Fundación Ventanas | Colombia

Fundación Ventanas provides academically-promising students who could otherwise not afford higher education with interest-free loans, along with a comprehensive mentorship program, to pursue either university or vocational degrees.Unlike traditional philanthropy, the loans are a form of social investment: students do not need a co-signer and pay back their loans interest-free once they have secured a job. In this way, Fundación Ventanas has become self-sustainable and over time plans to increase its number of loan recipients from 10 to 15 per semester.To diminish the risks inherent in providing loans to low-income students, Fundación Ventanas has incorporated various mechanisms to ensure its students can succeed in higher education and secure decent jobs after graduation, providing students with continuous support throughout their time in university or technical school.

2. The Baalabalaga School | India

The Baalabalaga School’s innovative financing structure allows it to retain all its accepted students regardless of their ability to pay.The Baalabalaga School is a unique, equal-opportunity private school located on a specially designed campus in Dharwad. The school employs a unique financing structure whereby it requires each student’s household to pay as much as they can afford, and the school funds the remainder of each student’s tuition. This cross-subsidization scheme has allowed working-class parents to enroll their students in the school from a young age and involve themselves in their education through secondary grade levels. The school operates on the belief that students benefit from more than the state-mandated curriculum but rather from participatory learning in a variety of enrichment subjects such as art, music, and daily-life lessons.

3. IDP Rising Schools Ghana

IDP Rising Schools seeks to empower existing marginalized low-cost private schools with a combined bundle of services through proprietor capacity building in financial management and school administration; targeted micro-finance loans to school owners; and techniques for effecting teaching training. Schools can use loans to finance infrastructure development, equipment procurement (such as acquiring a school vehicle), and land acquisition. Before applying for loans, school proprietors must go through IDP’s training program. This program trains school proprietors in best practices for school operations and management and teachers in best practices for the classroom. Through 9 learning modules, school proprietors are trained in 30 topics that include accounting, savings, managing credit, human resource management, and creating community ties that support the school. The rationale for requiring pre-loan training programs for school proprietors is based on the belief that loans will be lower risk after proprietors receive financial and management training.

4. GPOBA Education Program | Vietnam

The GPOBA Education Program improves educational opportunities for 8,040 underprivileged and disadvantaged secondary school students in Vietnam by reducing the cost of public and private secondary education through tuition subsidies tied to student attendance, behavior, and academic performance. It is the first program to use an output-based aid approach in education in Vietnam. Selected schools are incentivized to actively reach out to disadvantaged students through receiving tuition subsidies from EMW GPOBA. Schools pre-finance the tuition fees for each participating student, and at the end of each school term, the school completes a Term Report and forwards a record of student results to EMW and GPOBA, as well as a request for tuition subsidy disbursement. Before the tuition subsidy is disbursed, an Independent Verification Agent (IVA), contracted by GPOBA, audits a sample of schools and student results, and verifies that the request is correct. Only after meeting the audit criteria is the disbursement made to the participating schools.

To learn more about this topic, we encourage you to explore the following resources on the CEI website: