HE leaders say free tuition funding leaves large deficits

Heads of Chilean universities, professional institutes and university associations say a new system of transferring government funds to higher education institutions to reimburse provision for students receiving free tuition will leave them with “large deficits” and should be postponed or, better still, an alternative should be developed.

Their preference for the system of funding for ‘regulated fees’, the name given to the transfers the government makes to higher education institutions for each student from the 60% of families with lower incomes in the country, proposed by the Ministry of Education last week, is to drop it altogether and start a new process.

The Council of Rectors of Chilean Universities (CRUCH), which coordinates 30 private and public universities, and the group of nine public universities known as the G9 network question the technical model used by the ministry to calculate the fees.

CRUCH said in a public declaration published on 6 September that the model “is valid for a homogenous university system with alike institutions, which is not the case in Chile where the institutions have varying degrees of quality, selectivity and complexity”.

Both CRUCH and the G9 network argue that higher education institutions will be “severely affected” by the fact that the fees are calculated on “historical costs”, without considering future scenarios, the financing of quality and innovation improvements, nor changes in the setting, for example the effects of the COVID-19 pandemic.

Ennio Vivaldi, president of the Consortium of Chilean State Universities, 55% of whose students are on the free tuition scheme, says that their numbers will go on growing until at least 2050.

“This fact plus the challenge to provide them with a good quality education and a degree raises worries about the recent announcement of the Education Ministry regarding the new regulated fees for free tuition.

“In a process where the higher education institutions did not participate and which suffers from serious methodological and transparency deficiencies, amounts are set that will generate large deficits at all institutions and even … punishing the best of them,” he elaborated.

In his view, the ministry did not take a global view of higher education financing.

“While it focuses on teaching costs, it does not provide adequate compensations through alternative means of financing for other functions that are crucial to universities, such as research … It is hard to believe that not even the impact that research has on the quality of teaching is recognised,” he said.

Juan Eduardo Vargas, under-secretary of higher education, who is leading the allocations review, does not agree with his critics. He argues that the new system does recognise the quality and complexity of the institutions, such as years of accreditation, research, innovation, community links and employment opportunities of the degrees on offer.

Social factors such as the percentage of vulnerable students and the peculiarities of the areas where they are sited, are also factored in, Vargas says. The latter is a strong demand from the Grouping of Regional Universities (known by its Spanish acronym as AUR).

According to Vargas, the transfer of resources that the state will provide to institutions registered for the free tuition scheme will be higher than the existing ones in about 60% of all degrees. Teaching degrees will benefit the most, by 30%. As for the rest, the reduction will be marginal, he says.

Lorena Medina, head of education at the Pontifical Catholic University of Chile, told leading daily El Mercurio that she is happy with the increase in regulated fees for teaching degrees, which she sees as a recognition of the importance of teacher training and especially of the higher requirements for teacher training degrees.

The incorporation of technology, for example, has raised the amount of investment needed to impart teaching degrees, she explains.

The new regulated fees, which will be implemented gradually from the academic year beginning March 2022, will first be applied to degrees in teaching, law and in personal services such as tourism and gastronomy administration, which account for 18% of students in the higher education system.

A joint letter signed by all rectors of the G9 network of public universities, published in El Mercurio on 6 September, said: “The institutions registered for free tuition must know the global effect of the model of fee costs for all degrees and not only for a group of them. The development of such a sensitive and complex model must be open and participatory, must be tried and adjusted. Otherwise, it may mean a greater cost for the country and for the higher education system as a whole.”

The University of Talca, located in Central-South Chile, has estimated that, as it stands, the implementation of the new system in this first group of degrees would cut its income by CLP502 million (US$649,400) out of a total budget of CLP88 billion (US$114 million).

“These fees do not promote good quality education. The management model being applied does not recognise the role of regional universities nor that their costs are higher,” said Álvaro Rojas, rector of the University of Talca.

José Ábalos, executive director of AUR, said: “The ministry has applied in Chile an Australian model but … in Chile the cost of living in regions is much higher, as is the cost of attracting talented academics, researchers and professionals.”

Higher education institutions have submitted their view on the new regulated fees calculation system to the independent expert committee for the regulation of fees. The committee’s final verdict on the proposed review method is expected by the end of November.