Aldo Anfossi
Correspondent
La Jornada Newspaper
Wednesday, October 9, 2024, p. 21
Santiago. The Chilean president, Gabriel Boric, announced a bill to create a Public Financing Fund for Higher Education (FES), in order to end the current State Endorsed Credit system (CAE), a multimillion-dollar business for banking that costs the treasury some 1,100 million dollars annually.
The new system will have a cost equal to or less than what exists today, but applied with greater justice and to professionals who have already graduated from higher educationdetailed the Minister of Finance, Mario Marcel.
Boric thus tries to partially fulfill one of his most heartfelt campaign promises: to forgive the debt of 11,627 million dollars incurred by one million students or their families, who cannot cope due to the impoverished conditions of the labor market.
As of December 2023, there were 896 thousand CAE debtors, of which 697 thousand (78 percent) graduated and 199 thousand left without finishing. In 2023, in default with more than three overdue installments, there were 539 thousand (53.8 percent).
With the end of the CAE, young people and their families win, who will see their debt disappear or be significantly alleviated, which will contribute directly to the family budget. Future students also win, who will be able to study without the burden of debthe said in a televised speech Monday night.
He explained that part of the debt will be forgiven based on criteria of justice and merit.
All those who subscribe to this instrument will have a forgiveness of the percentage of their debt, which will be defined according to whether or not the person graduated from their degree, whether or not their debt is up to date and according to the number of installments they have paid to the date. In this way we will support debtors with fewer resources, we will recognize those who have responsibly paid their fees and we will encourage the regularization of those who still owe payments.he stated.
Those who paid the CAE will obtain future tax benefits in recognition of the effort to service the obligations.
According to the president, banks will not participate in the new instrument.
With the FES, there will be no room for speculation, abuse, or profit, but rather fair remuneration for the training received. At the same time, we will increase transparency and accountability standards, allowing citizens to know how resources are spent.he stated.
In Chile, free tuition has been in effect for 60 percent of the lowest-income population since 2016, after during the Pinochet dictatorship all universities charged monthly tuition and fees.
In Chile, around 80 percent of the workforce receives monthly income equivalent to about 900 dollars and 50 percent earns about 500 dollars; Many of those who graduated cannot find employment in the careers from which they graduated.
Although the open unemployment rate is 8.7 percent of the labor force, informal employment is at 27 percent and represents more than 60 percent of the jobs that are being created.