Higher education: A canary in a privatisation coalmine

A few months ago I was in Chile, where I was invited to lecture on issues in higher education. The moment I arrived, I was struck by how important the subject is in Chile, where it has a pervasive presence in everyday life.

Huge commercial billboards along the roads announce the services of numerous institutions of higher learning competing aggressively with one another for students, and university buildings display enormous signs too. The visual presence of higher education institutions is impossible to ignore.

In addition, casual conversations with local residents quickly revealed that higher education was very much on their minds, as they often brought up how hard they had to work, and how much money they had to borrow, to put their children or themselves through college.

Chilean universities are among the most expensive in the world relative to per capita income, and due to insufficient financial aid their students cover most of the costs. As a result, upward mobility is difficult in Chile, which has one of the most unequal distributions of income on earth in spite of its growing prosperity.

How did Chile get itself into this predicament?

Some history

The answer to this question can be found in the period following the 1973 military coup, which resulted in a sharp move towards a free-market system carried out by neoliberal economists trained at the University of Chicago. Because Chile had a military dictatorship, the ‘Chicago Boys’ were able to implement radical measures unchallenged.

One area in which Chile’s neoliberal experiment went beyond anything ever planned or attempted in the United States was higher education, which became heavily privatised by a stroke of the pen in 1980.

Thus, Chile represents an early and extreme case of privatisation in higher education, and what happens there may be seen as a cautionary tale for other countries: Chile is the canary in the privatisation coalmine.

Before 1980, Chile had eight universities, two public and six private, all receiving public funds and all offering tuition virtually free of charge. After 1980, there was a sharp reduction in public funding for higher education, and all universities were forced to charge tuition fees – the first ones in Latin America ever to do so – and to seek other sources of financial support, while students were encouraged to take out loans.

During that period, regional branches of existing public and private universities were made independent and given modest levels of public funding, a move aimed at weakening the power and influence of their parent institutions while lowering overall state support for higher education.

At the same time, new private universities, funded entirely with student fees, were established all over the country under rather permissive authorisation rules. The theory behind this was that market forces would satisfy the country’s higher education needs.

Indeed, the number of college students increased tremendously, as both supply and demand grew. Currently, more than 50% of young Chileans attend some sort of institution of higher learning, most of which are private.

However, the quality of many of these institutions is quite poor, in spite of the fact that an accreditation system was introduced in 1990 when the country made the transition from dictatorship to democracy. Chile has significant gaps in its labour market due to a shortage of qualified workers.

In addition, there is strong socio-economic stratification, with students from well-to-do families going to the most distinguished universities and obtaining the most prestigious and best-paid jobs, and students from modest backgrounds attending lower quality institutions and taking less desirable and lucrative positions.

The politics of higher education

No wonder that Chile has seen the birth of one of the most important student movements in recent world history.

In 2011, Chilean students took to the streets to complain about everything that was wrong with higher education, and there was plenty: high tuition fees, high interest rates for student loans, low fellowship funding, low social integration, and a very segmented and confusing education system of uneven quality that is drastically underfunded.

Although, in response to student protests, the government made some financial concessions, the system remains fundamentally unchanged, as no major structural reforms have been carried out since the time of the dictatorship. Therefore, instability can be expected to continue.

Indeed, Chile’s president recently appointed his fourth minister of education in three years, but student protests have not stopped. In fact, they are escalating, with other segments of society expressing their support for the student movement, as well as making additional demands.

As Chile prepares for general elections on 17 November, presidential candidates of all political stripes endeavour to address student demands in their proposals.

In fact, the most popular candidate, former president Michelle Bachelet, has recently been endorsed by the most famous leader of the 2011 student movement, Camila Vallejo, who is herself running for political office in a district of the capital city, Santiago.

Bachelet proposes a broad political alliance to curb the excesses of the neoliberal reforms implemented during the dictatorship.

Her goal involves mitigating or reversing the process of privatisation in some areas of public importance. These include, first and foremost, education, particularly higher education, which is perceived as the number one problem in the country at present.

The quality problem

Many families of modest means are depriving themselves of essentials and going deeply into debt to send their children to universities that in a considerable number of cases are little more than diploma mills and therefore are unlikely to help students obtain good jobs.

Bombarded by appealing commercials from a plethora of institutions of higher learning, students and their families often cannot distinguish universities that are serious from those that are not.

This is not unlike what is happening in the United States with the for-profits, except that in Chile the public cannot tell which institutions of higher learning are for-profit and which are not, because they are all technically non-profit.

A provision enacted when the dictatorship privatised higher education states that universities cannot be money-making enterprises. Many private universities, however, distribute funds to investors or supporters by large payments for space, equipment or services or by offering extremely well-compensated administrative positions and consulting jobs.

Another difference with respect to the United States is that, in Chile, students have much less access to financial aid and have to bear most of the costs of education, which are proportionally much higher than they are in America.

This is an untenable situation. Students and their families have been pushed to the limit, and there is a crisis of confidence that is affecting the entire nation.

When I was driving around the country, I saw a large commercial billboard advertising one of the more established universities, which was trying to compete for students with the new private institutions of higher learning by proclaiming itself a ‘real’ university. This reflects the confusion that pervades Chilean higher education at present.

Change needed

There is a great need for clarity, as well as affordability, which is why so many higher education experts are calling for governance reform.

Chile needs to draft a master plan for higher education in order to increase access, enhance quality and rationalise funding – in other words, in order to create a ‘real’ higher education system that takes the current realities and aspirations of this up-and-coming country into consideration.

Economic development has brought Chileans a higher standard of living. This has raised expectations and has made the gap between rich and poor that is exacerbated by the privatisation of higher education difficult to accept.

This gap is not unique to Chile. Privatisation has deepened social inequality in many nations.

Chile is simply one of the earliest and most extreme examples of this phenomenon and, therefore, can be seen as a preview of things to come in other countries, including the United States. For this reason, we should watch very closely what happens there.

* Cristina González is a professor of education at the University of California, Davis. Among other publications, she is the author of Clark Kerr’s University of California: Leadership, diversity, and planning in higher education: Transaction Publishers, 2011.

* Photo: Students protest for free higher education in Chile in 2011.