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CHILE-UNITED STATES
Higher education reasserts its role as a public good

Adopting one of Bernie Sanders’ policy proposals, presumptive Democratic US presidential nominee Hillary Clinton recently announced a plan to offer free tuition at public universities to students whose family income is US$125,000 per year or less. At present, 83% of American families are in this group.

This plan would be phased in over several years, starting with students whose families make up to US$85,000 annually. The threshold would go up by US$10,000 a year until it reached US$125,000 in 2021. This would be a matching funds programme in which the federal government would offer tuition grants to states that make financial contributions.

The proposal is bold because it emphasises that higher education is a public good, constituting a reversal of the privatisation trend brought about by several decades of neo-liberal policies.

The case of Chile

One country that is in the process of implementing a somewhat similar proposal is Chile, which is at the forefront of the struggle to reverse privatisation in higher education because it was in that nation that the earliest and most extreme privatisation process was undertaken.

The 11 September 1973 military coup that brought Augusto Pinochet to power led to a period of aggressive neo-liberal policies under the influence of conservative American economists.

The privatisation process occurred in the 1980s when Ronald Reagan was president of the United States. As a dictatorship, Chile was able to implement more drastic neo-liberal measures than the US, eliminating many social services and privatising higher education by decree.

Up to that point, public and private universities in Chile were virtually free of charge. The military government limited the growth of existing universities in addition to reducing their budgets and forcing them to charge tuition fees while pressuring students to take out loans.

At the same time, it encouraged the establishment of new private universities, many of which were of low academic quality. A significant number of these private universities were profit-making, which is technically prohibited in Chile, but institutions avoided this proscription by means of large payments to officers and employees as well as to providers of space, equipment, services and managerial or consulting activities.

Educational apartheid

The higher education system established by the military government was not dismantled when democracy returned to Chile in 1990. Indeed, most students today are enrolled in private universities and tuition fees are very high at all universities, including public ones.

The higher education process in Chile is among the most costly in the world in respect of family income. It is also one of the most socially segregated systems, with students of modest backgrounds attending low quality universities in disproportionate numbers.

This extreme situation, described by some as ‘educational apartheid’, is what motivated recent student protests, beginning in 2011 and continuing to the present time.

Protesters have focused on two issues: first, the need to eliminate tuition fees in higher education; and second, the need to eliminate profit from higher education.

In particular, they have been very critical of the new private universities, some of which are still managed by the members of the Pinochet regime who established them, thus constituting a visible reminder of that era.

Higher education was the most important issue during the last presidential election when Michelle Bachelet promised to eliminate tuition fees and profit from higher education. This was an ambitious plan. The country’s economic slowdown, along with strong vested interests committed to preserving the present system, make its implementation difficult.

Nevertheless President Bachelet, whose new slogan is “realism without retreat”, is moving ahead with her plan.

Higher Education Draft Bill

The Chilean president has just unveiled the Higher Education Draft Bill she is sending to Congress that, among other things, promises tuition waivers to students whose families are in the bottom 50% of the population in terms of income.

In fact, in advance of the bill and through a special appropriation, this benefit was already offered at the beginning of the current academic year, which started in March.

It is estimated that more than 125,000 university students are already benefitting from this measure. Many others who qualify for the benefit have either not applied for it or have not received it due to bureaucratic complications.

Students are unhappy about these problems. They are also dissatisfied with the terms of the Draft Bill, which proposes to offer tuition waivers to the poorest 60% of the population by 2018 and links expansion to the remaining four deciles – 70%, 80%, 90% and 100% – to the achievement of specific fiscal conditions in the country.

This is far from the instant free higher education that many people had envisioned, and student protests continue.

Institutionalised privatisation?

The country’s rectors are making their displeasure known as well.

Public universities are unhappy because they believe that the Draft Bill institutionalises privatisation by subsidising demand rather than supply.

The traditional private universities, which see themselves as public interest institutions, feel slighted because the Draft Bill does not recognise this role or even mention them as a group, and new private universities are afraid that their finances will suffer as a result of the changes.

In addition, all of these groups fear that they will lose autonomy. Thus, the response to the Draft Bill so far has been quite negative. Yet, with all its shortcomings, we believe that it is an important step because it points the country in a new direction.

Challenges and issues

In order to re-fund and re-democratise higher education, there are many challenges that the government will have to address. In particular, there are two that will require a great deal of thought.

The first is that the amount of money the Ministry of Education gives universities for each student covered under the new free tuition plan – the so-called reference tuition fee – often does not coincide either with the actual tuition fee or with the true cost of educating a student, forcing institutions to cover the difference.

More accurate and consistent reference tuition fees will need to be developed for the various disciplines and types of universities.

The second challenge has to do with which universities should be included in the free tuition plan.

It was generally understood that only the 25 traditional universities – 16 public and nine private – that pre-dated the Pinochet era, plus two new public universities established recently, would be included. But five of the new private universities managed to acquire the right to receive this benefit as well.

As the tuition-free plan is refined, an in-depth study of all Chilean universities may be necessary. In fact, Chile needs an implementation strategy – a master plan for higher education of sorts – and rectors, together with other experts and stakeholders, should play a central role in the planning.

Two issues are becoming evident.

First, the nation needs to strengthen and expand its public universities so that they can offer quality education to more segments of society in more locations, including the many regions of this long country spanning much of the Pacific Coast of South America.

Second, private universities, which at present educate most students, should get access to free tuition under specific conditions. This has been recognised by the government, which offered this benefit to the traditional private universities – those that existed before the dictatorship.

The problem is what to do about the new private universities, which were created during the dictatorship under permissive authorisation rules.

The government has taken the position that if these universities can show that they are non-profit and have achieved full accreditation, they should be given the right to receive free tuition, but many people believe that a more rigorous evaluation system should be devised.

Whatever system is adopted, it is important to normalise private higher education so that future groupings can be based on the actual characteristics of institutions rather than their historical origins. This would, among other things, help to rationalise the use of public funds.

Remarkable change

As the Higher Education Draft Bill moves forward, many Chileans have a feeling of failure because change is not coming as fast or as easily as they expected. They do not realise, however, how remarkable it is that it is taking place at all.

Chilean higher education really is undergoing a sea change, which is why the process is so messy. The rest of the world should take note, particularly the United States, where a similar path is being proposed and where there are comparable issues.

Hillary Clinton’s proposal does not lack critics, including private universities, which have gone on record stating that it limits choice for students. In addition, the matching funds system is problematic, as some states might decide not to participate.

In spite of the challenges, both Chile and the US face the need to reverse the privatisation trend of the last several decades, and this process is beginning. Slowly but surely, the idea that higher education is a public good to which all must have access is taking hold.

Cristina González is professor of Education at University of California, Davis, in the United States, and Liliana Pedraja is professor of business administration in the department of industrial engineering at the University of Tarapacá in Chile. This article is based ontheir Privatisation and Access: the Chilean Higher Education Experiment and Its Discontents article for CSHE article.
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