# **1. CHILEAN PUBLIC FINANCING SYSTEM OF TERTIARY EDUCATION**

The Chilean tertiary education system was changed profoundly during the 1980s following the most radical reforms to university education ever attempted in the region. The reforms aimed at improving efficiency by deregulating the sector and stimulating private provision. Moreover, the reforms sought to alleviate the finance burden of the state by charging tuition to students and encouraging higher education institutions to diversify their funding sources. As a result, Chile today features one of the strongest markets for tertiary education in the region.

The Chilean tertiary education system is comprised by three types of institutions: **Universities** offer undergraduate first-degree and postgraduate programs. They are the only institutions authorized to award bachelor, master and doctoral academic degrees in Chile. Moreover, universities are the only institutions authorized to award professional certificates in 17 professional fields (engineering, medicine, law, psychology, architecture, etc.). **Professional institutes** (IP) deliver four-year programs and are authorized to award professional certificates in any field, excluding the 17 fields that are the prerogative of universities. **Technical Training Centers** (CTF) offer two-year technical vocational programs which lead to a Higher Technical Level Certificate.

**Table 1. The Chilean Tertiary Educational System, 2002**

||**Institutions**|**Enrollment**|
|---|---|---|
|Council of Rectors Universities|25|243,593|
|Private Universities|38|125,740|
|Professional institutes|51|91,153|
|Technical Training Centers|115|61,123|
|Total|229|521,609|

_Source: MINEDUC (2003)_ Tertiary institutions are subjected to a statuary regime according to which they are located in one out of four categories, full autonomy, accredited, examined and supervised. Institutions with full autonomy have substantial freedom to plan and organize programs, designate personnel and administer the budget. The 25 traditional council of rectors universities were declared autonomous by definition. Chile has been a regional forerunner in quality assurance of tertiary education institutions and their course programs. Since 1999, provisionary national accreditation commissions have set standards and granted formal recognition to programs at the graduate and undergraduate level based on self-assessments and external peer-review processes.

To administer admissions, traditional universities set up, more than 30 years ago, the Academic Aptitude Test (PAA) comprising skills centered exams on math and language and more specific knowledge centered tests on various subjects. The PAA is designed and scored in accordance with international assessment standards. Access to traditional universities is highly competitive, with a few institutions concentrating most of the applicants.

## **Levels and mechanisms of funding**

Chile allocates a total of 2.2 percent of GDP to tertiary education, which is the highest percentage in the Latin American region (Graph 1). Due to the aforementioned policy of cost-recovery, most resources come from private sources. This reflects high private rates of return for tertiary graduates in the labor market and a political decision to target public resources to basic education and other social priorities.

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