The Challenge of Sustaining Student Loans Systems: Lessons from Chile and Colombia

Abstract

After a period of relative calm on university campuses all over the world during the first decade of the new century, 2011 and 2012 saw waves of strong student protests against the high cost of university education in places as diverse as Berkeley, Bogota, Khartoum, London, Madrid, Montreal, Santiago and Seoul. The Chilean government almost fell in 2012 because of student protests against the student loan system and demands for the abolition of fees in all higher education institutions. Partly as a result of the Chilean student loan crisis, students in Colombia also started to question the desirability of having a student loan system instead of providing free higher education for all. Is the end of student loans in Latin America in sight, echoing the growing concern in the United States, where the US$1 trillion student loan debt figure has been used to denounce student loans as a failed system and approach? In a recent New York Times column, Charles Blow described US debt levels as ‘staggering,’ and ‘having long-term implications for our society and our economy, as that debt begins to affect when and if young people start families or enter the housing market’ (Blow, 2013). In this context of crisis and apocalyptic statements about student loans in the Americas, the purpose of this chapter is to review lessons from recent developments linked to higher education financing in Chile and Colombia.