The president Gabriel Boric announced a bill to forgive the debt of thousands of university students and create a new financing system for higher education in Chileone of the main promises of his government.
Boric, who led the massive protests in 2011 that demanded “public, free and quality” education, announced that on Tuesday A bill will enter Congress that ends the State Guaranteed Credit (CAE) and replaces it with a new Public Financing for Higher Education (FES).
“The CAE is a problem for all of Chile: for those who pay it with great effort month after month, for those who have not been able to do so (…) and also for the fiscal coffers,” said the president in a televised message.
The CAE was established in 2006 to expand access to private universities, in a country where there was no possibility of studying for free.
At the beginning, it had an average interest rate of almost 6%, well above the financing system provided by state universities (2%), which led the first students to access this system to accumulate million-dollar debts.
Only in 2016, after years of massive street protests, did President Michelle Bachelet manage to establish free education for the poorest 60% of students.
According to President Boric, today more than 1.2 million people are debtors of the CAE and the State has had to disburse some 9,000 million dollars to take care of the debt.
Until the end of 2023, 539,000 defaulters were registered, according to the credit system administrative commission.
According to President Boric, if approved by Congress, 75,000 debts will be forgiven immediately. The rest will access a debt reorganization based on the degree of commitment to pay the CAE.
The new FES financing system will leave out the bank, and will take care of the entire student fee, unlike the current CAE which establishes a payment limit depending on the institution and the degree.
“The FES will not generate debt situations like the current ones; it eliminates payment and debt while the courses last and considers remuneration once they graduate,” said the president.
Source: Ambito
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