Who Should Pay for Education?

Posted By: Francisco Marmolejo|Dated: March 15, 2013

Last year’s demonstrations in Chile and Colombia are a cause for major concern for their respective governments. At the center of the debate there is a very simple question for which there is not an easy answer: who is supposed to pay for the provision of education for the inhabitants of a country? The citizens themselves and their families, or the state? Is a direct subsidy to the students the best approach, or should institutions be subsidized in order to make education more affordable?

Higher Education in Chile & Colombia

In both the Chilean and Colombian cases, there have been in somewhat different paths taken in matters related to the development of their respective higher-education systems, but both are experiencing similar situations in terms of strikes and public student demonstrations, which make not only their respective governments nervous but also those from neighboring countries.

In the case of Chile, massive liberalization of the higher-education system in recent years with limited public investment has led to impressive growth of the national higher-education infrastructure and to a significant increase in the number of Chileans having access to higher education (currently, 51 percent of college-age inhabitants), mostly due to the increased offerings by private institutions. In order to support such growth, the government has allowed higher-education institutions to charge high tuition and fees while establishing a public/private financial-aid mechanism in order to make education affordable to the majority of students. At the same time, the government kept a selective merit-based full tuition waiver scholarship for students having the highest scores in a national standardized admission test. In addition, the government maintained a subsidy scheme to a small group of public and private institutions who were members of the Council of Rectors (CRUCH for its acronym in Spanish).

Despite these efforts, growth in Chilean higher education has not been exempt from problems. A prominent issue that has emerged is that the great majority of Chileans having access to higher education finish their studies with significant debt, while the generous tuition-waiver scholarship tends to benefit students who come from better-off families who previously attended private high schools. In other words, it seems like taxpayer resources are used to subsidize those in less need, while the majority of Chileans assume a proportionally higher burden in order to pursue university studies. Finally, in recent years a variety of for-profit higher-education institutions have emerged. Although these institutions are properly accredited and offer an educational quality similar to other universities, they have become a natural target of demonstrators.

The Colombian case is somewhat different: a smaller and even more selective higher-education system has not grown at the same pace as the nation’s demographic trends, and every year there are about 600,000 students graduating high school out of which only a small portion advances to the higher-education system. Concerned with such a challenge, the government decided to embrace a major reform aimed at massively increasing the number of students in higher education from 37 percent to an ambitious 50 percent enrollment of college-age students by the year 2014. In order to finance such growth, the government of President Santos initially entertained the idea of allowing the presence of private, for-profit providers. However, due to pressure from different sectors concerned with the implications of privatization of higher education, the government decided to drop the idea from a proposed law being discussed by the national Congress.

For some sectors of our societies the answer is simple: education is a basic human right – therefore governments (and taxpayers) should bear the cost of the provision of higher education while offering it at minimum or no cost to students regardless of their socio-economic status. Also, many argue that admission policies should become more flexible and that massive public investment should be dedicated to finance infrastructure and operations in public higher-education institutions. On the contrary, other sectors consider that such an approach is just not sustainable in the long run, and that rather than directly subsidizing institutions, governments should make available scholarships and loans directly to the students based on a combination of economic need and academic merit. Also they argue that participation of private providers of education–including for-profit entities–should be permitted to foster competition and improve efficiency, assuming that they are properly regulated.

Those are some of the issues being debated not only in Chile and Colombia, but also in many other countries. As my colleague Dewayne Matthews of the Lumina Foundation tells me, the challenge faced by many countries is how to provide quality education to much larger numbers of students knowing that increasing institutional capacity is not something that can be achieved quickly, especially in a time of finite financial resources. In these cases, governments investing in education may be required to de-invest in other equally important priorities. Also, it is becoming clear that implementing reforms will necessarily affect the status-quo in higher education systems. In summary, we face a complex reality for which no simple solutions exist.

At the end of the day, the social unrest experienced in Chile and Colombia brings the discussion to the fundamental question that societies face in today’s world: Is higher education a public or a private good? Consequently, who should pay for it? La moneda está en el aire.

This article was originally published in The Chronicle of Higher Education at the following URL: http://chronicle.com/blogs/worldwise/who-should-pay-for-education/28784

Francisco MarmolejoFrancisco Marmolejo is the Executive Director of the Consortium for North American Higher Education Collaboration (CONAHEC), a network of more than 130 colleges and universities primarily from Canada, the U.S. and Mexico. Francisco also serves as Assistant Vice President for Western Hemispheric Programs at the University of Arizona and has taught at several universities and has published extensively on administration and internationalization. Marmolejo has consulted for universities and governments in different parts of the world, and has been part of OECD and World Bank peer review teams conducting evaluations of higher education in Europe, Latin America and Asia.

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