Publication: Chile's State-Guaranteed Student Loan Program : Analysis and Evaluation
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Date
2011-03-08
ISSN
Published
2011-03-08
Author(s)
World Bank
Abstract
Chile's Programa de Credito con
Aval del Estado (CAE in its Spanish acronym) is uniquely
positioned to help hundreds of thousands of
qualified-but-financially-needy Chileans attend and finish
tertiary education. The CAE program was designed to improve
access to and equity in tertiary education. In 2010, after
only four years of operation, the Program had 216,000 active
borrowers or 23 percent of the 940,000 students in
pre-grado. Even as the annual number of new beneficiaries
levels off, the portfolio will increase for the next several
years until reaching a steady state with approximately
460,000 active borrowers by 2016. This report is part of the
2010 Joint Studies Program between the Government of Chile
and the World Bank. The purpose of the study is three-fold.
First, to evaluate the impact of this program on access to
and equity in higher education, taking into account the
effectiveness of targeting qualified but financially needy
students and its complementarities with other major student
aid mechanisms. Second, to understand the size of the
economic commitment the Chilean Government has made with
this program, both in terms of its investment to date and
its contingent liabilities. Third, to formulate
recommendations for improvements going forward. The first
chapter summarizes CAE's legal framework and
institutional arrangement, explains how the CAE system
functions, and describes the main characteristics of the
loan product. The second chapter presents a brief overview
of CAE's structural cost according to current program
design and briefly describes the model used to calculate
CAE's actual cost. The results of the latter are then
included throughout the rest of the report as appropriate.
The remaining parts of the chapter focus on CAE's
stakeholder's students, tertiary education
institutions, financial entities, and the Government of
Chile and explore and analyze the impact the CAE program has
had on them. The third and final focuses on recommendations
for improving CAE: increasing loan repayment rates, lowering
capital costs of loan origination, and increasing the
coordination of CAE with other student aid programs. The end
of the chapter then shows what the financial impact of these
recommendations might be for the Government of Chile.
Citation
“World Bank. 2011. Chile's State-Guaranteed Student Loan Program : Analysis and Evaluation; Programa de Crédito Con Aval del Estado (CAE) de Chile. © Washington, DC. http://openknowledge.worldbank.org/entities/publication/524f3792-4725-51e3-bc11-a21c28e3d446 License: CC BY 3.0 IGO.”