Chile’s growing economy and stable politics have led to a steady increase in the number of students going abroad over the past several years. However, with economic growth possibly slowing and educational reform on the horizon, the market may have a few more question marks in the years ahead.
Growing demand for study abroad
OK Educational Travel Group is a leading agency with offices in Chile, Peru, Colombia, and Argentina. Pablo Jorquera is the agency’s chairman and, following a presentation he gave on these markets at the ICEF Latin America Workshop last year, he told ICEF Monitor that, while the overall number of students leaving Chile for study abroad still lags behind that of other Latin American countries, there are still important pockets of demand for international student recruitment.
“Education is a new concern for the whole new generation,” he says. “They want to have better skills for the future.”
Mr Jorquera notes that the strong performance of the Chilean economy in recent years, combined with growing populations of secondary and tertiary students, has led to an increase in the number of students considering study abroad.
Indeed, the economy of Chile has performed well over the past two decades and per-capita purchasing power has increased steadily since 1980. The International Monetary Fund notes as well that Chile had the highest gross domestic product per capita in Latin America in 2013.
Somewhere in the middle of 2013, however, economic growth began to slow. “[Economic growth] is projected to pick up only modestly in the near term,” says the OECD. “Declining copper prices and lower demand from China have reduced the terms of trade, business confidence and investment. A moderate recovery is expected in 2015 and 2016, driven by supportive monetary policy, expansionary fiscal policy and stronger external demand.”
Even so, Mr Jorquera sees continuing opportunities for recruiting students for programmes related to mining and fisheries – the two leading sectors of the Chilean economy – as well as medicine and business. He has also recently observed increased mobility of high school students for short-term overseas studies.
Mr Jorquera adds that education providers should visit Chile in order to provide the most successful ingredient for marketing success, which is personal contact. In the same vein, he espouses that educational institutions should build strong working relationships with trusted agents, who have the best resources to give the extra personal touch needed for successful relationships with prospective Chilean students and their families. “We work with people, not products,” he says.
Sizing the market
The overall size of the Chilean market is still much smaller than Latin American leaders Brazil and Mexico. In 2012, the country sent 8,814 higher education students abroad – a number comparable to what Brazil sent in that same year to the US alone. However, the number of tertiary-level Chilean students abroad has grown by about a third in recent years, and Mr Jorquera estimates the potential market demand for English language studies at about US$20 million per year. Popular study destinations for Chilean students include the US, Spain, France, the UK, and Germany.
Financial support for study abroad has been a factor in increasing outbound mobility from Chile, and in an earlier article we surveyed some of the major scholarship and exchange programmes, including:
- Becas Chile (“Scholarships Chile”) offering funding for masters, PhD, postdoctoral, and technical studies in energy, biotechnology, IT, environment, health, education, science, and engineering;
- Other components of Becas Chile provide assistance for English language teacher training and sabbatical assistance for professors of math and science;
- Pingüinos sin Fronteras (“Penguins Without Borders”), started in 2012 as a short-term high school exchange programme in New Zealand, expanded by sending 15-16 year olds to Canada this past academic year.
The demand for reform
Aside from the changing outlook for the economy, outbound mobility from Chile may also be affected by recent government transition and impending changes in public education. President Michelle Bachelet, who returned to lead the government in March 2014 after a previous term from 2006-2010, has promised to carry out extensive reforms to the educational system that may have notable impacts at all levels.
Since the days of dictator Augusto Pinochet (1973-1990), public education in Chile has been more of a private enterprise with less government support or oversight than in most countries. In the last few years, problems with the high cost of education, disparity in the quality of education provided to different socio-economic levels, and a rising number of fraud cases involving supposedly non-profit educational entities have led to rising concerns for students and families.
Chile has the second most-expensive private university system among the 34 OECD member states, surpassed only by the United States, and Chilean families pay an average of 85% of their children’s education costs.
And while the GDP growth has been strong in recent years, Chile ranks dead last among OECD countries in terms of income equality. As Undersecretary of Education Valentina Quiroga recently observed, “In Chile, your address determines your salary and education.” With this fact so prominently and openly acknowledged, recent scandals involving universities defrauding students and taking government funding without providing proper programmes have further outraged the Chilean public and fuelled the popular demand for education reform.
University students have been especially vocal in their opposition and have held several large-scale demonstrations since 2011. Last May, there were an estimated 40,000 protesters calling for reform in the streets of Santiago. And in August, students again marched to demand faster action by President Bachelet, who had made education and economic equity key planks of her Socialist Party campaign.
Major components of the planned reforms include increased national support for all levels of education, free primary education, more open selection standards for top-ranked schools, and the end of subsidies for private schools.
Most recently, Minister of Interior Rodrigo Peñailillo announced the government’s intention to provide free university education beginning in March 2016. “Issues of education, that address inequality, are at the core of the people’s concerns and we are working on it with the government,” added the minister.
Chile intends to finance these new measures by increasing the corporate tax rate to 25% (from the current 20%) and with various other revenue-enhancing initiatives. Questions abound as the reforms are yet to be implemented. For one, raising taxes may be more of a concern if the recent slowdown in the economy persists.
Furthermore, one possible outcome of the reforms may yet be an increase in students leaving for studies abroad. In late October last year, parents went to the streets protesting against some of the intended reforms. Middle and upper-class families have decried the loss of state subsidies and a subsequent possible swing towards open state-run institutions, which they fear will be substandard compared to their current private schools. One estimate is that around 200,000 students might be impacted and many parents, fearing a decline in educational quality or reputation at home, could look more to options abroad.