Our goal of this study is to estimate affordability and accessibility of tertiary education in selected Latin American countries. This seeks to provide more objective information for policymakers. Also, the analysis enables us to better understand the impact of student assistance policies for increased enrollment. Especially, this paper seeks to answer the following research questions:

- What are the costs of tertiary education to Latin American families?

- How important are living costs for tertiary education?

- Is financial aid improving affordability of tertiary education at the national level?<sup>3</sup>

This is the first attempt to compare affordability of tertiary education across Latin American countries. A series of studies looks at how much governments and countries invest in tertiary education (UNESCO and OECD, 2002; Holm-Nielsen et al, 2005; UNESCO, 2006, among others). Very few studies examine the costs for the individual countries (ICHEFAP, 2007; World Bank, 2003). None of these compare costs internationally. We take into account not only the direct costs of education such as tuition, fees and other costs, but also financial aid to students. Further, we compare across countries.

This report follows the methodology of Usher and Cervenan (2005) “Global Higher Education Rankings: Affordability and Accessibility in Comparative Perspective”. This enables an international comparison of our findings for Latin American countries.<sup>4</sup> To measure affordability of tertiary education, we estimate education costs (tuition and other fees), living costs, grants, and loans. These elements are incorporated into four different affordability indicators: education costs, total costs, net costs, and out-of-pocket costs. To measure accessibility of tertiary education, we compute four indicators: participation rates, educational attainment, educational equality index and gender parity.

For the analysis, we chose Brazil, Colombia, Mexico and Peru. These countries seem well suited for an analysis given that: (i) they represent 66 percent of the region’s population, (ii) these countries represent relatively different approaches to financing tertiary education, and (iii) information and data could be collected to a minimally acceptable degree. Further, the World Bank has on-going policy dialogue with these countries within tertiary education. We realize a broader selection of countries would enrich the study and make it more representative of the entire region, but it was not possible with the available information and budget.

Unfortunately, we have had to rely on different sources of data, in particular for tuition costs. We are comparing tuition information from administrative data, household survey 3 The paper does not rigorously evaluate the impact of student financial aid for the individual student. Other studies have done so: (ICETEX, 2006) and (Canton and Blom, 2004)

> 4 High-income countries included are Australia, Austria, Belgium, Canada, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Sweden, the United Kingdom and the United States. Due to the limited availability of data on access to tertiary education, Japan and New Zealand are measured for affordability only.

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