Lessons Learned from Chile’s Shift to Tuition-Free College

January 27, 2020

In 2011, Chile was marked by the masses protesting the outrageous tuition rates and extreme levels of student debts. In 2016, the Chilean government responded by enacting a program known as gratuidad—making college free for qualified students. With the goals of reducing student debt, increasing enrollment among lower-income students, and decreasing the inequality entrenched in the education system and its students, gratuidad brought many students hope. Almost four years since its inception, gratuidad can be a useful reference for countries like the U.S., where the transition to a tuition-free higher education system has been considered by students and politicians alike.

Chile’s road to free college began in 2011 when students, teachers, and their allies protested the government and demanded reform to the education system (Taylor 2011). They argued that the government had commodified education through the “marketization” of higher education. Education is a commodity in the sense that universities rely on the high rates of tuition, enrollment, and student debt to operate (Delisle and Bernasconi 2018). Prior to 2011, the total enrollment rate was 27 percent for students in the lowest income decile. However, for students in the top decile, the total enrollment rate was 91 percent (Delisle and Bernasconi 2018). These rates were determined to be a result of the stratospheric tuition rates and debt levels. Activists called upon the government to create policy reforms with the goal of making higher education more accessible to students of all incomes.

In 2013, Michelle Bachelet of Chile’s Socialist Party centered her campaign on making higher education tuition-free for students who come from families in the lower 70 percent of the income distribution by 2018 (Delisle and Bernasconi 2018). Known as gratuidad, Bachelet’s program aimed to make higher-education tuition-free for all students by 2020.  Bachelet won the 2013 election based on this campaign, and her proposed tax revenue program that would fund gratuidad.

Once in office, the promises of her campaign proved to be challenging, as the expected cost of gratuidad was 2.1 trillion Chilean pesos or $3.14 billion (USD) a year. With stagnant economic growth and minimal tax revenue inflows in Chile, the price of free college seemed impossible. Adapting to the current state of the economy, the Bachelet Administration adopted a gratuidad program that would only cost 518 billion Chilean pesos or $810 million (USD) a year (Delisle and Bernasconi 2018).

Implemented in 2016, this revision of gratuidad was a fraction of the original cost. However, this version only applied to the lower 50 percent of the income distribution rather than the lower 70 percent that Bachelet had intended. In 2018, the program would expand to students in the lower 60 percent of the income distribution (Delisle and Bernasconi 2018).

Gratuidad is a mandatory program for all public universities. The program is also available for adoption by accredited private universities, as well as technical training schools and professional institutes. Due to the costliness of gratuidad, the government placed additional restrictions on the program. One restriction is that the tuition funding is only available to students for the time designated for the completion of academic degrees (ie. four years for a bachelor’s degree).

This restriction is the aspect of the program that frustrates most students. In Chile, 10 to 30 percent of students take more time to complete their degrees than this expected timeline allows (Servicio de Información de Educación Superior 2016). In the U.S., the number of students who graduate in four years is only 40 percent (Digest of Education Statistics 2017). For these students of the lowest income distribution, finding the resources to fund their remaining tuition can seem impossible.

Other problems with gratuidad stem from the universities themselves—specifically the private universities. Like in the United States, Chile has a mix of private and public universities: 44 and 18 respectively. Since the launch of gratuidad, 15 private colleges and universities have been forced to close or are in the process of closing (Nadworny, et. al. 2019). Free tuition in public universities left many private universities at a competitive disadvantage for increasing enrollment rates and obtaining revenue from tuition.

The anticipated outcome of universal education was a distant reality in Chile. The main factors that hinder universal education include that not all universities participate in gratuidad. Additionally, the cutoff of students based on income distribution impedes Chile’s progress towards equal opportunities in education. The result is that gratuidad only impacts a partial percentage of the population. In 2016, only 12 percent of undergraduates received the benefits of gratuidad. This number increased to 22 percent of undergraduates in 2018. However, the reach of gratuidad has proven to be minor considering the total population and the persistently high tuition rates (Delisle and Bernasconi 2018).

In 2016, only 30 universities out of the 62 universities participated in gratuidad. In other words, only 12 private universities adopted gratuidad and accepted its benfits. In Chile, 85% of students are enrolled in private institutions, but most of these students are from wealthier families (Delisle and Bernasconi 2018). Gratuidad was built with the purpose of providing low-income students with equal higher education opportunities, but with the limited participation of private universities, equal opportunity will remain out of reach for many low-income students. However, gratuidad is structured so that the government allocates funding to universities who participate in the program. In the case of many private universities, these remittances are not enough to cover their financial losses from gratuidad—meaning they must cut funding or obtain the lost revenue elsewhere. These private universities are the most expensive and prestigious (Delisle and Bernasconi 2018). Thus, gratuidad is not available in these selective universities, and the inequality of higher education persists.

Despite the adverse effects of gratuidad, research results from the Chilean Ministry of Education demonstrate that the program has been successful in increasing the enrollment rates of lower income students in higher education. To illustrate, 15 percent of university enrollments in 2016 would not have occurred without the tuition benefits of gratuidad (Delisle and Bernasconi 2018).

While this data from the Ministry of Education suggests that access to higher education in Chile was increased amongst the low-income student population, an independent study by Alonso Bucarey of MIT suggests otherwise. Bucarey predicted that gratuidad will lead to lower rates of enrollment among low-income students. For the low-income students that choose to enroll, Bucarey predicts that they will be forced into the lower quality universities. Bucarey’s findings suggest that when universities extend the eligibility of scholarships to students from families with mid-range incomes, the universities found themselves with more applicants and were forced into becoming more selective. Low-income students tend to have lower scores on college entrance tests. Thus, as a result of an increase in selectivity, low-income students were crowded out of the more selective universities.

Buracrey’s research shows that gratuidad would have this effect on low-income students applying to selective universities, as the upper income students who receive higher entrance exam scores would crowd them out of the universities. Buracrey finds that Chile will experience a 20 percent decrease in enrollment of low-income students who before gratuidad would have enrolled in these universities (Delisle and Bernasconi 2018).

Gratuidad additionally runs the risk of decreasing the quality of education at Chilean universities. This side effect of gratuidad will be most evident at the participating private universities who must cut costs due to the loss in finances from participating in this education program (Delisle and Bernasconi 2018).The restraints gratuidad places on funding also risks the integrity and diminishing the quality of all universities.

The Chilean model of tuition-free higher education offers useful insights to countries considering the transition. Policymakers should also remain attentive to additional unintended consequences of gratuidad that are hypothesized to occur. These predicted consequences will negatively impact low-income students—the exact population the program intended to benefit. More data is needed to analyze gratuidad in its entirety. In the following years, the U.S. and other countries looking to pursue tuition-free university should watch closely to see if gratuidad leads to a higher level of enrollment amongst the low-income student population, or if the low-income students are crowded out of the higher education system as a result of an increase in selectivity. As gratuidad has only been active for a few years, it is still possible that the program will result in an increase in degree accessibility and university enrollment.

However, the Chilean model of free college suggests that it may be more effective for policymakers to pursue other alternatives. A more progressive alternative to free college includes targeted financial aid, which increases access to higher education while not financially burdening the university’s revenue. Targeted financial aid is what the education system is built upon in countries like the U.S. and Chile before gratuidad. Thus, a better alternative to free college might be to reform the targeted financial aid system altogether to create more inclusive opportunities for financial aid and scholarships to limit the burden of student debt.

 

REFERENCES

  1. Elissa Nadworny, Jon Marcus, Maria Paz Gutierrez. (November 25, 2019). "What The U.S. Can Learn From Free College In Chile". NPR.
  2. Jason Delisle , Andrés Bernasconi. (March 15, 2018). "Lessons from Chile’s transition to free college". Brookings.
  3. Jon Marcus. (November 25, 2019). "How one country with close parallels to the United States has made college free". The Hechinger Report.
  4. Ann Taylor. (August 10, 2011). "Student Protests in Chile". The Atlantic.
  5. SERVICIO DE INFORMACIÓN DE EDUCACIÓN SUPERIOR. (December 2016). "INFORME DURACIÓN REAL Y SOBREDURACIÓN DE LAS CARRERAS O PROGRAMAS GENERACIÓN TITULADOS 2011-2015 ".
  6. Digest of Education Statistics - 2017. (2017). "Table 326.10.Graduation rate from first institution attended for first-time...". National Center for Education Statistics. Retrieved Thursday, January 16, 2020.

About Author(s)

Carley Clontz
Carley is an undergraduate senior at the University of Pittsburgh. She is studying Economics, Spanish, French, Global Studies, and Latin American Studies. Through academic and research programs, Carley has traveled to Mexico, Peru, and Bolivia. Her articles focus on human rights violations, economic and political developments, and systemic violence.