Registration and free education – a policy instigated by Chile’s vocal student movement that staged massive protests demanding quality, free, not-for-profit education – has been Chile’s main achievement in higher education in the past decade.

Government financing for providing registration and tuition-free higher education for the most vulnerable 60% is now secure with the approval by Parliament on 24 January of the higher education reform law. The law also green-lighted progress towards universal coverage.

Free higher education had been operating since 2016. A tax hike was passed to finance it but the money was not enough so the government had to resort to including free tuition for higher education in every year’s national budget.

This created great uncertainty and put off some private universities which met the conditions from joining. The conditions were: four years’ accreditation, to be not-for-profit and to have at least one member of staff or a student in any advisory or decision-making body.

Former president Michelle Bachelet’s centre-left political coalition included the policy in its programme. She promised free tuition to students from the 70% poorest families, but could not reach the target because the money obtained from the tax reform passed to finance it fell short and the economy slumped during her term of office (March 2014 to March 2018).

“We want to build a more equitable country with equal opportunities for all. With Parliament’s approval of free higher education, we enshrine it in law as a social right which should never have been in hands of the market!” tweeted Bachelet after the approval. Left-wing parties favoured the policy on the grounds that universal education is a basic right.

This year around 360,000 higher education students will study for free. They come from the 60% poorest families and will be studying in higher education institutions that have signed up to take part. Five new universities and two technical colleges have done so in 2018.

Thirty-three universities, six professional institutes and seven technical colleges are offering free education this year. The number of technical colleges will increase in future once those who wish to do so have changed from being for-profit into non-profit institutions.

At first only state universities could register to participate in the free education policy but the Constitutional Court ruled that it was arbitrary to make a distinction between private and public institutions, forcing the government to backtrack.

In the past two years, more than 262,000 higher education students have benefited from the policy.

Economic costs

In 2016, the first year of the policy, and then again in 2017, the 30 institutions registered lost out financially because the fees set by the government were lower than the fees they charged. At present, 10 institutions are still running a large deficit. Half of them are private universities that do not receive payment for basic expenses from the government.

The delay by free-tuition students who do not finish their courses in time in paying their corresponding fees to continue – because free tuition applies only for the duration of the course – adds to the deficit of universities offering free tuition, as does the fact that the government has established a set fee for students not on free tuition.

Universidad Diego Portales, one of the universities running a large deficit, has said that to make ends meet it has had to cut back on teacher hiring and new initiatives. Regional universities have had less of a financial problem. Most are government-owned; this means they receive government funding so they are less dependent on undergraduate student fees.

Progressing free tuition beyond the 60% poorest students, which is where it stands today, is considered a huge problem by most members of the political coalition that backs President Sebastián Piñera, who took office on 11 March. They argue it ties up future government resources and maintain that progress towards the universal free education goal should be conditional on the health of the economy.

A study published last week by Libertad y Desarrollo, a think-tank, calculated that, according to economic development forecasts by the Finance Ministry, free tuition for all higher education students would only be reached in 2084 and for the 70% poorest only in 2032.

María Paz Arzola, coordinator of Libertad y Desarrollo’s social programme, says it is realistic to recognise that moving beyond today’s free tuition for the 60% poorest students will only happen when Chile has the resources required. She also points out that the priority given to free tuition in the law will mean diverting funding from other areas, such as social needs or primary and secondary education.

Universal free tuition is backed by only 42% of Chilean society, according to a leading national survey released in early 2017. Some 52% said they favoured free education exclusively for low-income students.

The experts’ consensus prior to the 2011 student protests was that Chile, a middle-income country with limited resources, should focus on providing credits that students would pay depending on their future earnings. Today higher education students who took out loans or even received grants that did not pay the full fee are highly indebted and are demanding a write off, which Piñera’s government has said is a non-starter.

In the past few days the government announced it is working on scrapping the greatly maligned Government-Guaranteed Credit which would replace private banks with a new institution that would administer the loans and make repayment dependent on graduates’ salaries.

Impact so far

According to a study undertaken by the Ministry Education based on registration figures provided by the 30 universities offering free tuition, 86.7% of students who obtained free tuition in 2016 carried on with their studies in 2017. The percentage was higher than the retention rate of those same institutions (82.6%) and significantly higher than students who did not have the benefit (77.9%) and-or than the higher education average (68.7%).

Another positive consequence was the increase of first-year undergraduate students from the 50% lowest income group in universities registered for free tuition (by 35% in 2016). The analysis carried out by the Ministry of Education detected that the number of vulnerable students went up by over 60% in 10 of those institutions. In Universidad Diego Portales the increase was 95.71%.

Adriana Delpiano, then minister of education, commented that the figures showed that free tuition “generates a commitment from students with themselves and their effort to do well, as well as with the whole of society”.

Next steps for free tuition for HE students

As a presidential candidate, Piñera said no student who had obtained the free tuition benefit would lose it. He wished to stop at the 50% poorest students’ level but his policy became so unpopular that he had to backtrack.

When asked at a recent seminar about where the government stood on free tuition for higher education, Gerardo Varela, his education minister, said: “Let me be clear, free tuition for higher education was approved by law, it is included in the national budget, it is contained in President Piñera’s programme and he has asked me to implement it. So free tuition is here to stay.”

A few days later he declared: “We will keep to the 60% [poorest students’] free tuition, which will continue to increase if the economy is doing well.”