Brazilian youth’s dreams fade as student loans dwindle
RIO DE JANEIRO, Jan. 17 (Reuters) – Around 3 million aspiring students in Brazil will find out this month whether they have secured one of 230,000 places at a free public university. For many, this year there is no plan B.
Plunged into its worst recession in decades and with its budget under pressure, the Brazilian government has more than halved the number of low-interest loans it offers to poorer students to attend more schools. ‘paying private universities.
With most public university places reserved for the wealthiest students trained for the private school entrance exam, the cuts endanger one of the Left Workers’ Party’s proudest achievements in the past. his 13-year rule – social mobility.
During a commodity-driven economic boom of the past decade, former President Luiz Inácio Lula da Silva increased spending on education and social protection to help 35 million people escape poverty.
For poor Brazilians who lack the small number of free university places, a cheap loan from the Student Financing Fund (FIES) is the best hope of funding a college education and joining the middle class.
Brazilians who receive tertiary education earn on average 2.5 times more than those without, a larger gap than any other OECD country, according to a 2011 study of the group of mostly developed countries .
Today, the reduction in FIES loans to 300,000 has left many struggling students in despair and exposed the government’s failure to undertake comprehensive education reform.
“It’s a really unfair system. Only the rich get free places, ”said Larissa Roriz, 18, at a job fair in a poor neighborhood in Rio de Janeiro, Brazil’s second largest city.
Educated in public school and unable to afford a crash course for the college entrance exam, Roriz was pessimistic about her chances: “That’s why I’m here, trying to get an internship at the university. if I can’t.
Roriz is part of a young generation for whom the promise of a reborn Brazil has been taken from them. With rapid growth of 7.6 percent in 2010, the economy is now mired in its worst recession in over a century.
Their growing frustration with job losses and spending cuts could inject greater energy into anti-government protests, so far dominated by the wealthiest Brazilians.
While the number of available loans is still higher than offered just a few years ago, this marks a step back and alarms education experts who say Brazil – a nation of over 200 million people – desperately needs to keep increasing the number of people going to University.
“The changes (at FIES) are really bad for equality in Brazil,” said Naercio Menezes Filho, education and employment teacher at Insper Business School, based in Sao Paulo.
“It’s really serious for the future, because one of the main mechanisms for social advancement in Brazil is access to university.
Between 2010 and 2014, during the first term of Lula’s successor president, Dilma Rousseff, the number of new FIES loans increased almost tenfold to reach 732,000. By that time, the cost of the program had jumped to 14 billion reais ($ 3.5 billion) and represented 15% of federal spending on education.
Rousseff has loosened the strings of the public purse in an attempt to come out of a downturn. While the economy failed to rebound, the deficit widened to 10% of GDP and forced it to make deep cuts, including in the FIES.
Even after the rise of the Workers’ Party, Brazil’s spending on higher education at 0.9% of gross domestic product (GDP) is in line with that of emerging countries like Russia and Colombia – and significantly below the OECD average of 1.2%.
For education experts, the real problem is the government’s failure to undertake lasting reforms during boom years, such as means testing for places in public universities.
As a result, it continues to pay for wealthy students to attend elite public universities, but has reduced lending to the poor to attend private institutions.
Interest rates on loans also jumped to 6.5% from 3.4% and the repayment period shortened.
“The fundamental problem is that the government is spending most of its education budget paying for people who don’t need to be paid,” said Ricardo Paes de Barros, economist at the Ayrton Senna Institute who works to improve educational services.
De Barros says that students at public universities should pay what they can afford and that the money raised by charging the wealthiest students will be used to expand the public university system as well as provide more FIES loans.
The reduction in FIES has also affected once-booming private education businesses, as the loans effectively serve as a government subsidy. With about three-quarters of Brazilian universities private, it is a multi-billion dollar business.
Shares of large education companies Kroton Educacional and Estacio SA fell 35% and 40% respectively last year. International companies such as UK-based Pearson have also been affected by the recession in Brazil.
Kroton and Estacio began offering loans in an attempt to cover the shortfall, but rates worse than FIES fueled fears of rising student debt. Both companies declined to comment.
Rousseff and his Workers’ Party are convinced that the social gains made over the past decade will not be erased by the recession.
But development experts insist education is key to future growth as Brazil languishes in a middle-income trap, in which rising wages erode competitiveness and poor education and infrastructure is unable to compensate for it.
For De Barros, the results of the changes are clear.
“The result will be a less educated generation. “($ 1 = 4 Brazilian reais)
Additional reporting by Juliana Schincarol; Editing by Daniel Flynn and Kieran Murray