The education sector in the Lao PDR (Laos) faces significant challenges. Access to education improved over of the past decade but substantial gaps remain, and previous progress is being undermined by the impacts of COVID-19 and ongoing economic difficulties. The quality of education was already poor before these shocks. The sector is severely underfunded due to a steep decline in public resources allocated to education. In addition, limited job prospects for graduates reduce demand for quality education. To prevent these challenges from causing a lost decade for education in Laos, urgent attention is needed in three areas. First, the government should implement comprehensive economic and fiscal reforms to increase available resources for education and facilitate private sector development to create income earning opportunities for graduates. Second, resource allocation within the sector should be improved for equity and balance. Lastly, the education sector needs to better translate available resources into the learning outcomes of children and youth by reducing inefficiencies and rigidities that constrain the key drivers of learning: teachers, school financing, teaching and learning materials, and school infrastructure. Addressing constraints in these three areas will help reverse the decline in education financing, close access gaps, and enhance service quality.