Economic Commission
From CRUCH's perspective, the proposed law to forgive State-Guaranteed Student Loans (CAE) fails to address the impact of its implementation or recognize universities as guarantors of the CAE system. Furthermore, it lacks the support of a comprehensive review of student financing and studies that substantiate who requires loan forgiveness.
The Education Committee of the Chamber of Deputies continued its discussion on Tuesday, July 4th, regarding the bill to forgive the State-Guaranteed Student Loan (CAE). During this session, the Council of Rectors of Chilean Universities (CRUCH) announced its reasons for not supporting the bill, which seeks to extinguish all obligations arising under Law 20.027 on Financing Higher Education Studies.
Before the members of parliament, the Vice-Rector of Economic Management and Administration of the University of Talca, representing the Economic Commission of the CRUCH, Luis Urra Monsalves, stated that “there is doubt about what is best for the system as a whole and not with a partial view of only forgiving the CAE, so the proposed law generates inequity towards all debtors.”.
What particularly worries CRUCH is that, although the CAE is granted by the financial system, the institution in which the student is enrolled is the guarantor, along with the State, so the universities are the main guarantors of the debts to be forgiven.
“The project does not address all the areas of impact of its implementation, nor does it consider that universities are guarantors of the CAE system,” stated Vice-Rector Urra. He added that the initiative does not include a comprehensive review of student financing and that there are no studies to substantiate who requires loan forgiveness. In short, the bill does not solve structural problems in higher education in Chile.
Consequently, “CRUCH’s opinion is not to support this initiative, since, in general terms, it is not equitable to debtors, does not respect the autonomy of universities, and does not consider the losses that the system, and specifically CRUCH universities, would suffer if it were to be implemented,” Vice-Rector Urra stated.
Other foundations
In addition to the reasons mentioned, the Vice-Rector of Economic Management and Administration at the University of Talca stated that there is no clarity regarding what will be forgiven, whether it is all loans or only those that are in arrears, nor what will replace this financing system, since "if the CAE is eliminated, students will continue to need equivalent sums to finance their studies.".
According to the vice-rector, another aspect that must be considered is what would happen to CAE beneficiaries who work and receive income, since this policy "could generate incentives to not pay university debts, establishing an ideology of debtors, for example in debts such as the University Solidarity Credit Fund (FSCU) and loans granted by the universities themselves.".
Finally, Luis Urra also indicated that the second clause of the project, which refers to the fact that each year the Ministry of Education will determine the maximum value of the annual fee that higher education institutions can charge for each degree, threatens the economic autonomy of universities, since there is already a regulation of regulated fees that is being applied.
Text: CRUCH Communications
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