January 2007 · Number 100 39512 A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank`s Latin America and Caribbean Region. Colombia Assisting Talented Students from Low-income Families Attend Tertiary Education Pedro Cerdán-Infantes and Andreas Blom The returns to tertiary education have been shown to be With the support of the ACCES (Acceso Con Calidad a la large, especially in developing countries. Yet access to Educacion Superior, in Spanish) Project Colombia shifted tertiary education is usually unequal, limited by the high its tertiary education policy, implementing comprehensive cost of attendance and inadequate access to financial reforms to improve equity of tertiary education. The result markets, especially for students from low socioeconomic of this shift has been impressive: enrollment in tertiary backgrounds. Recent figures on the total cost of tertiary education increased by 30 percent in the last 3 years to over education, including tuition, fees and living expenses, show 1.3 million students (Figure 1), and the number of doctoral an average of 35% of per capita GDP in OECD countries. students tripled to reach over 1,000 in 2006. Not only is In Latin America, the cost represents a higher percentage the program supporting the large expansion in tertiary of GDP per capita, around 66% in Colombia and 96% in enrollment, ACCES is also improving equitable access by Peru1. With such large costs of provision, countries with allowing economically disadvantaged students to attend limited resources find it difficult to finance large expansions tertiary education and reducing the probability that they of tertiary education. In many countries, this has resulted drop out by 30 percent. In addition, the Project enhances in small elites attending university. This was also the case the transparency of the market for tertiary education by in Colombia: in 2002, prior to the inception of the Project, increasing the availability of information regarding tertiary the enrollment rate in tertiary education among the low- education institutions to students, their families, universities income population was less than 20 percent, compared to and the government. close to 60 percent for high-income students. Access to good quality tertiary education was limited due to scarce What has the Project Achieved? resources, in particular for students from poor families. The project has contributed to improved access to tertiary Figure 1 ­ Enrollment and Enrollment Rates in Tertiary education for the poor through three direct outcomes: Education in Colombia 1. The availability of student loans for low-income students was markedly improved by the project. The percentage of the loans assigned to low-income students (defined as strata 1 and 2 out of six socio-economic strata in Colombia) was only 30 percent in 2002, before ACCES became effective (see Figure 2). Since inception, the ACCES program has supported over 80,000 students, 69% of which are from strata 1 and 2. This effective targeting of the student loan component has resulted in more students from disadvantaged backgrounds being able to finance their studies, thus increasing their ability to enroll and reducing Figure 2 Percentage of Beneficiaries by Income Level, 2. The support to doctoral programs has dramatically Total Before ACCES, and ACCES increased the number of Colombian doctoral students and programs. The number of doctoral students has tripled since project inception with more than 50 percent of students being financed by the ACCES program (Figure 3). By 2006, the number of programs has grown to 51 from 21 in 2002. Increasing the number of Colombians with graduate degrees is necessary to improve the quality of tertiary education through more skilled professors, and improving the human capital for scientific and technological innovation in Colombia. Figure 3 ­ Enrollment of Doctoral Students in Colombia the probability that they drop out for economic reasons. An impact evaluation of ACCES, which was commissioned by the Project, found that drop out rates were 30 percent lower for beneficiaries than for non-beneficiaries with the same observable characteristics. While rigorous identification of the impact on the probability of enrolling was not possible due data limitations, there is compelling evidence that the program is improving the chance that poor students will access high quality institutions. For example, in Universidad del Norte the share of students from low socioeconomic strata increased from 11 to 34 percent the semester that ACCES became effective. 3. The institutional capacity of the Ministry of Education In addition to the successful targetting of the program, has increased substantially. With the financial support ICETEX, the Colombian public student loan bank, of the Project, a Vice-Ministry of Tertiary Education was substantially improved the administration of student loans. created. Since its creation, this vice-ministry has designed For example, ICETEX reduced administrative costs from and implemented several innovative policies for tertiary 13.2 percent of its budget in 2002 to 7.6 percent in 2006. education. With the support of this Project, the information Low administrative costs are key to ensuring that sufficient system for tertiary education (the so-called SNIES using its resources are available to Spanish abbreviation), was modernized. Though still support the student loan not fully implemented, the system will provide better program. Further, ICETEX management information to individual universities and verified the income level of policy makers by reporting key indicators relevant to every low-income beneficiary a modern tertiary education institution. These include through house visits. Lastly, student tracking, graduation rates, drop out rates, ICETEX was transformed into space utilization, study program and key financial a public financial institution information. Another valuable instrument supported under the supervision of the by the project is the labor market observatory, which Financial Supervision Authority computes and disseminates detailed information on with the objectives of further the employment rate and salaries of graduates. This improving institutional capacity instrument, launched a year earlier than expected, is and transparency and to finance available at http://www.graduadoscolombia.edu.co. more students by gaining access By using the information, potential students can make to additional resources in capital informed decisions about which careers to choose. markets 2 · January 2007 · Number 100 Further, university administrators and policymakers can Science and Technology) and is the first program to support use the information to know which graduates are in high national doctoral programs. Previous projects supported demand and can subsequently educate the graduates that students to study overseas. Students receive loans that are firms and organizations are willing to employ. partly forgiven if the graduate completes on time. Through the project, Colciencias finances a semester at a foreign What were the main actions supported by the Project? institution for the student, and assists the student's thesis The ACCES program was approved in 2002. The objective director to participate in international research groups, thus of the Project is to improve the quality promoting Colombia's integration and equity of Tertiary Education through into the global pool of knowledge. improving the sub sector's response to Further, the component supports the society's needs for high quality human creation of new doctoral programs, as capital and thereby enhance Colombia's well as the provision of key scientific competitiveness. It supports a series and technological equipment for of selected actions focusing on equity, new and existing programs through a quality, governance and finance that competitive fund. will improve tertiary education in Colombia in a comprehensive and long The Institutional Strengthening term manner. For example, the Project component implemented by both the focuses not only on university degrees, Ministry of Education and ICETEX but emphasizes the need to increase has three objectives: (i) to improve enrollment into short cycle courses tertiary education's linkages to the (technical and technological education), labor market through the provision undergraduate programs and doctoral of information on graduates with programs. Students should study relevant diverse degrees and institutions. career fields to gain jobs, enhance This forms the basis of Labor productivity and competitiveness. In Market Observatory for education. particular, the Project has three components: student aid, Synergies are achieved by combining doctoral programs and institutional development information on graduates from universities with information from tax authorities, labor market surveys and social The Student Aid component seeks to promote the security databases; (ii) to improve and expand the current equitable expansion of tertiary education by allowing quality assurance system. This is achieved by assisting meritorious students from the poorest backgrounds to the universities to upgrade their institutional information receive a mix of grants (25 percent) and non-subsidized systems, by creating standard indicators for reporting, and loans (75 percent) to support study at the tertiary level and through the creation of a web-based system to facilitate allow middle income students to receive loans. ICETEX collection of this information in a central database; and (iii) implements the component. The support targets students to build capacity in the Ministry of Education by financing from lower strata by establishing clear eligibility criteria development of improved procedures and training. for applicants, simplifying the application process, and increasing marketing. In particular, ICETEX undertook What are the Next Steps? two crucial reforms of the delivery of student loans. First, Despite the impressive achievements of the Project, all tertiary education institutions became directly involved significant challenges remain for the future. First and in the allocation of student loans through their student aid foremost, the gains should be sustainable. This depends offices. Second, students were no longer required to present to a significant extent on the capacity of ICETEX to real estate or other assets to guarantee repayment, this enforce the repayment of loans and the willingness and requirement had previously prevented tens of thousands of ability of students to repay. Adequate management of students from qualifying for loans. the portfolio and low administrative costs are crucial to operate and expand the program to this effort. Effective The Support to Doctoral Programs component is outsourcing and use of information technology will also implemented by Colciencias (Colombian Institute for play a fundamental role in this process. Further, ICETEX January 2007 · Number 100 · could gain access to more capital through the private capital another example. A positive outcome required market--possibly with governmental support--to continue not simply an increase in the supply of students lending to students. Second, in order to complement the for identified program but also assistance to the large increase in enrollment, the government needs to institutions to develop the infrastructure necessary continue emphasizing the quality and relevance of the as the basis for quality research. Lastly, the project's education programs. In particular, the major expansion of the relatively small investment in information systems, doctoral programs should be reviewed, possibly through an designed to provide students and their families with international evaluation. Third, special emphasis needs to be the information necessary to guide their decisions paid to technical and technological tertiary education, which regarding institution and careers, has greatly enhanced the project has not been sufficiently successful in expanding. the outcome of the project's major investment in Fourth, continued expansion of tertiary education and student assistance. student loans implies the need to reach into a new segment of students that probably require more encouragement · Simplifying and systematizing student loan and preparation to enter tertiary education. This will administration is of special importance to ensure necessitate new actions on the part of the implementing the success of student loans programs. ICETEX agencies, including increased provision of student guidance,. implemented a web-based system which simplifies Lastly, the linkages between tertiary education and the and systematizes the application process. Further, it science, technology and innovation systems will need to be revamped all its management information systems and strengthened to maximize the future impact of the increased processes, which led to a more efficient, transparent enrollment on Colombia's economic development. and effective institution. Further, improvements in the collection of student loans are enhancing the long- What can we learn from this Project? term sustainability of the student loan scheme. Colombia's success in managing an equitable expansion of · Institutional reforms and strong leadership are tertiary education provides some important lessons for other essential for the sustainability of the program. The countries: creation of a Vice-Ministry of Tertiary Education fostered innovations in policies and established · Student loans offer a cost-effective alternative to a governing institution for tertiary education in increase enrollment and reduce drop-out rates of Colombia. Most importantly, the vision, dedication, students from lower socioeconomic backgrounds. and hard work of the leadership and staff at the The high out-of-pocket costs and inadequate access to implementing agencies (ICETEX, Ministry of financing prevents individuals from attending higher Education and Colciencias) have been fundamental education and benefiting from the high returns which to the success of the Project and the deep institutional can result. While well-targeted loans are important, changes that have occurred. most students from the poorest backgrounds require additional funding in the form of grants to enroll in Notes tertiary education. 1 Murakami, Y. and Blom, A. (forthcoming). Acces- · Reform of tertiary education needs to be sibility and affordability of tertiary education in Latin comprehensive. Student aid has been shown to American compared to OECD, World Bank, Washing- be an important element in improving access to ton D.C. And Usher, A. & Cervenan, A. (2005). Global tertiary education. However, this Project has shown Higher Education Rankings 2005. Toronto, ON: Educa- that attention must also be given to the quality and tional Policy Institute. relevance of course offerings if reform is to succeed. About the Authors For example, demand-side financing did not prove sufficient to stimulate a major growth of technical and Andreas Blom is an Education Economist and Pedro technological tertiary education and it was necessary Cerdán-Infantes is a Junior Professionl Associate with to provide complementary support to the institutions the Human Development Department (LCSHD) of the offering these courses. The doctoral programs provide Latin America and the Caribbean Region of the World Bank, based in Washington D.C. "en breve" is produced by the Knowledge Team of the Operations Services Department of the Latin America and the Caribbean Region of the World Bank - http://www.worldbank.org/lac · January 2007 · Number 100