|Alex Usher (AU): Paula, can we start by painting a picture of Chilean higher education, tuition fees, student aid, all that kind of stuff from about 15 years ago say at the end of the first Bachelet administration in 2008-2009. It seems like a pretty complicated system. In addition to having lots of both public and private institutions, there’s separate systems of student aid for students in public and private. The government doesn’t look at actual fees, it looks at reference fees to set student aid levels. It seems very complicated to an outsider. Was it? What was the system and how did it work?
Paula Clasing Manquian (PCM): Yes, it actually was very complicated. Maybe to start, I can say that the Chilean system is composed of a vocational sector and then the university sector. The vocational sector is composed of two-year institutions and four-year institutions, which were mainly private institutions and some of them were for profit. Only in this sector, there was a profit. And then the university sector, which is composed of three kinds of institutions: the state institutions some private but publicly subsidized institutions that receive direct funding from the state which are also considered kind of public institutions, and then the private ones, which are the youngest one. The first one, the public universities plus the subsidized private but subsidized universities are the oldest and most prestigious institutions in the country. They confirm what is called the coach institution, the ones that belong to a council of rector. So that’s kind of the overall system.
So, financial aid for students. The system is financed mainly through fees, tuition fees. At the beginning of 2010, there were financial aid, as many countries have, based on scholarships and loans. Scholarships have a merit component. All of them have a merit component and a need-based component. There were two kinds of loans. One loans for the traditional universities, the ones that are the state universities and private subsidized universities. Students in those can access one kind of loan, which has better ways of paying back or better interest rates. Then the other loan was for the students in the other kind of institution. One of important issue is that financial aid only covers a reference tuition, which could be between 80 to 100 percent of the real tuition or the sticker price. It was very complicated. It depends to which institutions you go, the ones that the financial aid you can access, so not so easy.
AU: Then we come to the regime of Sébastien Piñera, starting in 2010. One of the most important events during his presidency was a set of student protests, which lasted nearly two years. These were in part spurred by a kind of a general critique of neoliberalism. If I recall correctly, they started because of the privatization of public transportation routes. But they had some very specific demands in respect to tuition fees and access. What were the protesters aim exactly? What changes did they want?
PCM: Student protests are very common in Chile, but these ones were very special because they were able to get support of the public opinion on what they were aiming for. Basically, it was having a free public higher education of quality. So that was the main aim of the student protest. It’s important to understand that when we say public, maybe in other parts of the world public means like state universities, for example. But here in Chile, because we have this weird system where there are private institutions that have been publicly subsidized, public is not equal to state universities. So, that was one of the big issues in the policy about what is public? There were big debates after. That was a big issue here to finally have introduced some complexity in the policy design.
AU: So, more about quality than about fees, actually?
PCM: Yes. There was also an issue about certification of students by quality of the institution. Basically, higher income students or students from higher socioeconomic levels, we’re going to institutions of higher quality, while students like from low socioeconomic status, we’re going to institutions of lower quality. So, the student protests were focusing on that issue also. They wanted to change the system and improve the quality of the institutions, so that all students went to higher quality institutions from the system.
AU: Now, as you said, these protests were different. They were deep. Even if they didn’t immediately achieve their aims with respect to higher education, they had a huge effect on national politics it seems to me because some of the student federation leaders went on to very significant political careers. Most notably, of course the current president Gabriel Boric, and Camila Vallejo, who is in the cabinet and acts as the government spokesperson. How did that happen?
PCM: Both were the leaders, and some other students also were student leader on the protests, and they were able to articulate these demands in a way that resonates with the public opinion. So, they got the support of the public opinion. And they were also leaders in a way that people resonate with them. This protest started in 2011 through ‘12, ‘13, and in 2014 Gabriel Boric and Camila Vallejo and others like Georgio Jackson, for example, were elected as congressmen and congresswomen and so they transitioned from student leaders to legislators now, and they helped in a way to push the free tuition policy into the policy agenda. Then later, Gabriel Boric because of charismatic reasons, he was able to like in the support of his party and then was able to being elected as president today.
AU: Let’s now go back now to 2014 and Pinera is gone, temporarily. Michelle Bachelet has been re-elected partly on a promise of gratuidad, which was free tuition, which was supposed to be paid for by generating new tax revenue that never quite materialized. So, they had to make some compromises in that first year, and it turned out that gratuidad couldn’t be for everyone, but only for those whose families are in the bottom six income deciles. How was that received by student leaders? Gratuidad, I would have thought from a student perspective, means gratuidad, and here it turns out that actually only a minority of students are going to get something free, not counting loans and grants. How did that play out when it was implemented?
PCM: In the first year of Bachelet administration, it became clear that it was this policy was very expensive for the country, and the tax reform was not able to cover all these expenses in this policy, so they kind of abandoned this idea. And then, she promised free tuition for students in the six lowest income deciles in the country. But later, it was implemented for students in the first five income vessels. Of course, students were not happy. But as I mentioned, students are always protesting here, and the student movement lost its power in all this year. I would say that they didn’t have much power to push that, and other actors became more important in this period in the policy design, specifically higher education institutions, became more important and were more present on the design and students, although they were not happy, they were not able to introduce their demands any longer from these original ideas.
AU: I want to talk about two limitations on the universality of this program beyond family income, which we just discussed before the break. The first is that in effect the program is voluntary, right? Institutions can choose not to participate. My understanding is that at least at the beginning some private ones did choose to opt out. Is that still the case? What’s been the trend in terms of institutional participation among private institutions?
PCM: It’s mandatory for state institutions and it’s voluntary for private institutions. Now, the program began with 30 universities. The first year was only for universities and began with 30 universities of the 60 universities in the country. In the first year, of course, all state universities and all private but publicly subsidized universities were in the policy, plus, two or three private universities. And now there are about 66 universities and vocational institutions in the policy; about 35 universities, and the rest is vocational institutions. About 65 percent of the enrollment are in these institutions. So, a lot of our students that can opt for the free tuition policy.
So, I think that, so our first issue of the policy design was that it was clear that to have a real impact on the system, it could not be only in state universities as we originally thought. It was not possible because the state universities only have about like 20 percent of the enrollment. So, then the idea was to bring this traditional universities, private and publicly subsidized universities to the policy that engage in the policy and that gives legitimacy to the policy. Then they have ~30 percent of the enrollment, but these are the most prestigious institutions. So, although they don’t have a lot of enrollments, they are the most prestigious ones. That legitimates the policy. Also, even when the policy has some rules for institutions, for example, they have to accept a regulated tuition and enrollment capacity, the money incentive is big. So, if you are in the policy and students are admitted to the institutions, their tuition is paid by the state. So, you will receive the money no matter what; you don’t have students that don’t pay, for example, which was a big issue before. So, it’s kind of secure money, and I think that’s a big incentive for private institutions who targeted these low-income students.
AU: But there must be some reason why private some private institutions stay out, right? Is it, is the financial incentive just not big enough? Is it that they’re paying less than the full tuition fee, like the reference fee in the old days? Why do some private institutions stay out?
PCM: So, for universities is that those that have a high tuition, which is higher than the reference tuition, they have less incentives to be part of the policy. Now, there are very few institutions, elite institutions, private institutions, are the ones that are still out of the policy, but most of the other institutions are in the policy. For the vocational sector, the thing is that only non-profit institutions can be part of the policy. In this sector, it was profit was allowed, so if they have to change their change to be a non-profit to be part of the policy, but that’s something some of them don’t want.
AU: Got it. The other limitation on the program is that there is a time cap, right? I believe you can only benefit for four years while many students or at least used to take six or seven years to graduate. How has that aspect of the program worked? I know in some places or countries like Canada, if we did that, we would call it a big incentive for on time completion. But have study times shortened thanks to Gratuidad? Has the subsidy actually worked that way?
PCM: Short answer, we don’t know. I don’t think that there are studies yet that have measured that. But the policy only covered the nominal duration of the program of study. So, if that is five here, it would cover five. It’s two years, only two. For example, medicine here is seven years. It would cover the seven years. The problem is that almost like very few students finish in the nominal duration of the program. They take the nominal duration, plus one or plus two years. The problem, why they take longer is maybe because the high school preparation to go to university is not always the best. So, students enter higher education with some lack of knowledge that institutions have to kind of remedy or implement somehow like remedial courses. So, it could be an incentive if they have the preparation that would allow them to do the programs in five years. But for many students, that’s not the case. They need a little bit more time to be ready to start these five years.
AU: With all these restrictions, some around income and some around institutions, some around time, how many students receive Gratuidad? Is it 20 percent? Is it 30 percent of students? Who get it? What do we know about the effects that Gratuidad has had on access to higher education in Chile? Concretely, what have the benefits been? What can we say about expansion of opportunity?
PCM: So about how many students receive free tuition this year or last year was about half a million students have free tuition, about a third of the students enrolled in higher education have this benefit. So, it’s kind of the biggest financial aid. It’s around from all the students that receive financial aid, about 70 percent of them have free tuition. So, I did my, my doctoral dissertation on this topic about the impact of policy on access and persistence. What I found is that it has not impact on access, but it has an impact on changing preference of students. So, we have no more students in higher education because of the free tuition policy but the policy was able to move students from institutions outside the policy to institutions in the policy.
AU: Interesting. I know there was some modeling very early on in this, I think it’s Alonso Bucarey from MIT suggested that he suggested early on that there would be a movement of students between institutions, but he had a different take on it. That was that it would compound the problem stratification that the students from higher socioeconomic strata might cluster more heavily at the CRUCH institutions or the Council of Rectors institutions, did that happen? Have we seen changes in terms of stratification?
PCM: I think it’s maybe too early to say because of the COVID-19 pandemic, enrollments were not so easy to study this process because of the pandemic issue. So, I don’t think there are kind of any study that has been able to say that for sure. But one of the requisites of the free tuition policy for students that want to go to the university sector is that they have to do it through the standardized system, which is composed of a standardized test and the high school GPA and ranking. Because the tuition policy regulates the enrollment growth of institutions, I think that in the future, it might be the case because the policy is moving students that were before in institutions outside the policy to these institutions inside the policy. So, it’s generating more applications. So, in the long run, nothing changes but I think it would increase selectivity because universities would have to select.
AU: In the end, it’s all about the spaces at the elite universities, right? If that’s a fixed number, it’s hard to get it.
PCM: Yeah, there are no extra spaces and more applicants.
AU: Although the fight over Gratuidad is quite ideologically intense, it survived the return of Sebastián Piñera to power in 2018. How did Chile’s right accommodate itself to this policy? Did Piñera make any changes at all to the program in his second term?
PCM: No. First, when he was a candidate, he thought of doing something then he said no and will stay with that. There were some ideas of expanding the free tuition but only in the vocational sector. At the end, they didn’t do anything. I think because it’s too costly, politically speaking, to get rid of the free tuition policy. It benefits a third of the students are benefitting because of the free tuition policy right now.
AU: That brings us to the current government which is just filled with veterans from the protest of 2011. Given that, I would have assumed that they would have had a much more activist higher education agenda, but it doesn’t seem like they’re doing much. Now, maybe I’m just missing it, and maybe, much of it was tied up with the constitutional referenda of 2022. What do you think? What is going on right now with this government and higher education?
PCM: Not much, really. One of the promises of the presidential campaign was the forgiveness of one of the major loans that have a higher interest rate than the second loan. So, there was this idea of forgiveness. There were some issues with the tax reform that the president wants to make that didn’t work. So, with that they don’t have the money to do anything about that. It has not been a topic of discussion really. But there are other things in the country going on that have taken the focus of the policies right now.
AU: My last question to you: what do you think the future of the gratuidad policy will be? It seems to me, it’s too firmly entrenched to dismantle, but at the same time, it’s too expensive to expand. So, is where we are now a kind of permanent equilibrium, do you think?
PCM: I think so. Yes. I think that. So, the policy was enacted as a state law in 2018, and it has some triggers that said if when the country has X incomes due to taxes X, then the next decile will enter in the policy, and so on. In practice, it would be very difficult to reach those levels, so I don’t think we will be seeing an expansion of the free tuition policy in the future.
AU: Paula, thank you very much for joining us today.
PCM: Thank you.
AU: And it just remains for me to thank the show’s excellent producers, Tiffany MacLennan and Sam Pufek and you our listeners for tuning in. If you have any comments or suggestions for future podcasts, please feel free to contact us at podcast at higher ed strategy dot com. Please join us next week when my guest will be Isak Froumin, who is head of the Observatory of Higher Education at Jacobs University in Bremen, Germany, and we will be talking about research universities in the nations of the ex-Soviet Union. Bye for now.