Abstract: In Mongolia, over the past decade, the external debt burden has increased drastically and the country joined the list of heavily indebted countries with total external debt rising from less than 50 percent of GDP in 1997 to 253 percent to GDP in 2019. How will this increasing external debt will affect the financing of education in the country? What are the possible ways to protect education expenditure from cuts? This study by using qualitative methods such as literature review, secondary data analysis and interviews intends to answer these questions. We conclude that despite growing the total external debt, the education financing has been stable and even grown in nominal and real terms compared to 2012. Therefore, the astronomical public external debt will worsen education financing and may result in a decline of already hard-to-achieve education access and quality for the country’s most underprivileged children. However, despite the growing debt burden, the government has several other channels to raise funds and finance the education sector.