“This project contains an article that somewhat moderates the growth of free services because it is also an important expense for the Treasury, and because It is relevant to review how quickly we want to continue advancing in this, regarding what it means and impacts fiscally.”.
The Minister of Education, Nicolás Cataldohe referred to this in Mesa Central to one of the contents of the bill introduced this Tuesday by the government that modernizes the higher education financing system and that in addition to creating new contingent contributions to income, also attempts to change the current rules of the free policy regarding the search to universalize the benefit promoted by former President Michelle Bachelet, who took office in Chile in 2016, and which aims to finance higher education for students who need it most.
When the benefit was launched, aid was focused on young people from the most vulnerable 50% of the population. The following year it was expanded to technical training centers and professional institutes and covered up to the most deprived 60% – or sixth decile – coverage that continues to this day. Currently, about two out of every five undergraduate students study thanks to this support that has been praised several times by the current ruling party.
“At the time we received many doors slammed and they told us everything, they told us that we should not mobilize, that this was the exclusive responsibility of professional politicians (…) Today, Eva (a woman present at that time) would not be studying with free of charge if it had not been for the student mobilizations,” said, for example, President Boric a few months ago in reference to having achieved free higher education. Some time later, the Undersecretary of Higher Education, Víctor Orellana, stated in a similar vein that for this new bill they were “working under principles of justice, fiscal responsibility and maintaining and not to go back on the advances that have been made in free”.
The law that regulates this benefit -21,091- establishes requirements for economic indexes that the country must meet to activate each next decile and, therefore, get closer to universal gratuity. In short, this depends on the increase in structural tax revenues. And thus, in the thirty-fourth article of the law it is established that “as of the year following the year in which it is verified (…) that structural tax revenues represented at least 23.5% of the country’s Trend GDP, In the two immediately preceding years, higher education institutions must grant free studies to their students in accordance with the provisions of paragraph 5 of title V, provided that said students come from homes belonging to the first seven deciles of the lowest income. of the country’s population.” That figure then rises to 24.5% to extend coverage up to the eighth decile, to 26.5% to cover up to the ninth, and to 29.5% so that the benefit is granted to all students.
As Cataldo pointed out, in point 4 of article 35 of the bill recently introduced by the Executive, these figures undergo modifications. The initiative reads “modify (Law No. 21,091) the thirty-fourth transitional article in the following manner: a. Replace, throughout the article, the expression “Trend GDP” with the expression “Non-Mining Trend GDP”. b. In letter b), replace the figure “23.5%” with “29.5%”. c. Replace, in letter c), the figure “24.5%” with “30.5%”. d. Replace, in letter d), the figure “26.5%” with “32.5%”. and. Replace, in letter e), the figure “29.5%” with “35.5%”.
The issue is that since the law was enacted one of the above conditions has never been mettherefore it has never been possible to “activate” and, with it, expand the deciles of coverage. And by raising the figures this would become even more difficult, so reaching universal gratuity would be postponed, a situation that the Ministry of Finance, through the Budget Directorate (Dipres), addresses in the project’s financial report.
“Current projections estimate that in 2027 the current condition of observing 23.5% of structural tax revenue over GDP in two years prior to verification would be verified, and 24.5% in 2029. This would extend free tax revenue to new deciles. , in the years 2028 and 2030, respectively, which would be postponed with the new proposed figures. The above implies that additional annual spending will no longer be made with respect to what has already been considered in scholarships or CAE, of close to $40,000 million and $100,000 million, respectively,” the report reads.
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The logic behind having done this, they say from the Executive, is that it is seen that these indices would be met too much in parallel with a possible installation of the new financing system, the FES. That’s why, The changes to free of charge are to make activation more difficult and thereby give the new system fiscal space to be installed. And if the study centers that are currently assigned to free education reached 100% coverage, resource transfers from the State would have to increase by billions of pesos at the same time.
“As anticipated in the free debate, this policy has generated difficulties in higher education institutions as a consequence of regulated fees, with a very high cost for the Treasury. With that as context, the measure to delay the incorporation of new deciles is due to an understanding that it is necessary to set limits on both the costs and the consequences of this,” he says. Raul Figueroaformer Minister of Education in Piñera II and today director of the IPP UNAB, who adds that the fact that the Executive seeks to change the rules in its bill “shows that the idea of universal free education that was originally proposed by those who today are part of the “The government had serious implementation problems and it implied an impact on the fiscal coffers that was not well calculated.”
To Carlos Saavedrarector of the University of Concepción, gratuity would not be affected by this project, since for the affiliated institutions “the new financing scheme is oriented to those deciles that do not access gratuity and for institutions outside of gratuity.”
On this matter, other sources within the Executive rule out that changing the figures is to make it impossible to comply with the indices that activate coverage to a new decile and that free coverage will continue to advance as long as the country has the fiscal capacity to do so. That they continue to embrace this public policy and that the idea is to have both tools in dialogue with each other, also considering that joining free of charge is voluntary for the institutions – the FES would also be voluntary if approved – therefore there could be a study house that only offers one of the alternatives.
Likewise, they add that to protect the deciles that currently do not have free coverage, the FES will exist, designed for students who do not currently qualify for free coverage.
In this regard, Minister Cataldo himself points out to La Tercera that with the project entered they are “organizing” the student financing instruments. And in this way, “along with advancing in providing a solution for debtors by encouraging adherence to the educational debt reorganization plan, we want to transition to a new, more efficient financing model for higher education.”
In this transition, the Secretary of State adds, “We have proposed a change in the pace of implementation of free and in the current scholarship system, rationalizing fiscal expenses in order to guarantee that the country has the necessary resources to protect the right to education at this level and throughout the educational system, in line with the trajectory perspective that we have promoted by the ministry.”
In that sense, Rector Saavedra says from the UdeC that the fact that the financing scheme changes “generating better opportunities for students who are not financed free of charge does not affect or question the very existence of this policy,” although warning that “ The need to incorporate contributions from families in deciles 7, 8 and 9 should be part of the legislative discussion if the project is accepted for processing”, considering that currently the project aims to only cover decile 10.
