World Bank2013-03-262013-03-262011-03-08https://hdl.handle.net/10986/12954Chile'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.El Programa de Crédito con Aval del Estado (CAE) de Chile se ha posicionado excepcionalmente para ayudar a miles de chilenos, que reúnen los requisitos necesarios pero necesitan apoyo financiero, a acceder a la educación superior y culminar sus estudios. A pesar de las muchas virtudes en el diseño y la ejecución del programa, éste necesita mejoras en áreas clave para convertirse en un elemento sostenible de la política para la educación superior de Chile. El presente informe propone cómo lograrlo. El informe incluye numerosas recomendaciones específicas cuyo propósito es atenuar los costos del CAE. Su rápida adopción e implementación podrían reducir los costos generales del Programa hasta en un 50%.en-USCC BY 3.0 IGOACADEMIC PERFORMANCEACADEMIC YEARACADEMICALLY QUALIFIED STUDENTSACCESS TO FINANCINGACCESS TO TERTIARY EDUCATIONACCESSIBILITYACCOUNTINGADMINISTRATIVE COSTSALTERNATIVE SOURCES OF FINANCINGAMOUNT OF CREDITANNUAL PAYMENTSASSETSAUCTIONAUCTION PROCEDURESAUCTION TECHNIQUESAUCTIONSAVERAGE DEBTBANK POLICYBANKSBASIS POINTBASIS POINTSBENEFICIARYBIDBIDSBONDSBORROWERBORROWINGBORROWING CAPACITYCAPITAL COSTSCAPITAL MARKETSCAPITAL REQUIREMENTSCAREERSCASH FLOWCASH FLOW ANALYSISCASH FLOWSCASH ON HANDCASH OUTFLOWSCASH TRANSFERCENTRAL BANKCOLLECTION EFFORTSCOLLECTION PROCESSCONTINGENT LIABILITIESCONVENTIONAL MORTGAGECREDIT BUREAUCREDITSDEBT BURDENDEBT BURDENSDEBT LEVELSDEBT PAYMENTDEBT PAYMENTSDEBT REPAYMENTDEBT SERVICEDEBT SERVICE RATIODEBTSDEFAULT RATESDEFAULTERSDEFAULTSDEGREE PROGRAMSDEGREESDEPENDENTDEVELOPING COUNTRYDEVELOPMENT CORPORATIONDISBURSEMENTDISBURSEMENTSDISCOUNT RATEDIVERSIFIED PORTFOLIODROPOUT RATESEARNINGSECONOMICS OF EDUCATIONECONOMIES OF SCALEEDUCATION LOANEDUCATION SECTOREDUCATION STUDENTSEDUCATIONAL BACKGROUNDSEDUCATIONAL LOANSELIGIBILITY CRITERIAEMPLOYEEEMPLOYEREMPLOYERSEMPLOYMENTENROLMENT RATESENROLMENT SHAREEQUAL TREATMENTEXCESSIVE DEBTFACE VALUEFAMILIESFAMILY INCOMEFINANCIAL ASSISTANCEFINANCIAL DIFFICULTYFINANCIAL NEEDFINANCIAL NEEDSFINANCIAL OBLIGATIONSFINANCIAL SYSTEMFISCAL RESOURCESFIXED INTERESTFIXED INTEREST RATESGLOBAL DEBTGOVERNMENT GUARANTEESGRACE PERIODGRADUATION RATESGRANT PROGRAMSGROSS DOMESTIC PRODUCTGROSS TERTIARY ENROLLMENTGUARANTYHIDDEN SUBSIDYHIGH DEBT SERVICE RATIOSHIGHER EDUCATIONHUMAN CAPITALHUMAN RIGHTSINCOME GROUPINDIGENOUS SCHOLARSHIPINDIVIDUAL LOANINFLATIONINFORMATION SYSTEMINFORMATION SYSTEMSINSOLVENCYINSTITUTIONAL ARRANGEMENTINSTRUMENTINSURANCEINSURANCE POLICYINTANGIBLEINTEREST RATEINTEREST RATESINTERNATIONAL STANDARDSINVESTMENT FUNDSJUDGEJUDGMENTSLABOR MARKETLEARNINGLEARNING OUTCOMESLEGAL ACTIONSLEGAL FRAMEWORKLEGAL PROCEDURESLENDERSLEVERAGELEVERAGESLIQUIDITYLOAN AMOUNTLOAN AMOUNTSLOAN BALANCELOAN BALANCESLOAN DOCUMENTATIONLOAN GUARANTEESLOAN PAYMENTSLOAN PORTFOLIOLOAN PORTFOLIOSLOAN PRINCIPALLOAN PRODUCTLOAN PRODUCTSLOAN RECOVERYLOAN REPAYMENTLOAN REPAYMENT RATESLOAN REPAYMENTSLOAN SERVICINGLOAN SIZEMANDATEMINIMUM WAGEMINISTRY OF EDUCATIONMORTGAGENATIONAL ACCREDITATIONNEEDY STUDENTSNEGOTIATIONSOPPORTUNITY COSTPAR VALUEPENSIONPENSIONSPREPAYMENTPRIVATE BANKSPRIVATE CREDITPRIVATE CREDIT BUREAUPRIVATE UNIVERSITIESPROFESSIONAL DEGREEPUBLIC FINANCEPUBLIC POLICYPUBLIC SUBSIDIESRATE OF RETURNRATES OF RETURNREAL INTERESTREAL INTEREST RATEREMAINING DEBTREPAYMENTREPAYMENT BEHAVIORREPAYMENT OBLIGATIONREPAYMENT PERIODREPAYMENT PERIODSREPAYMENT RATEREPAYMENT RATESREPAYMENTSRESEARCHERSRESERVESRISK-FREE RATESAVINGSSCHOLARSHIP PROGRAMSSCHOLARSHIPSSECOND LOANSTATE GUARANTEESTATE GUARANTEESSTUDENT AIDSTUDENT ASSISTANCESTUDENT DEBTSTUDENT FINANCIAL AIDSTUDENT LOANSTUDENT LOAN BENEFICIARIESSTUDENT LOAN PROGRAMSTUDENT LOAN PROGRAMSSTUDENT LOANSSUBSIDIZATIONT-BILLSTAXTAX RETURNSTEACHERSTEITERTIARY EDUCATIONTERTIARY EDUCATION INSTITUTIONTERTIARY EDUCATION INSTITUTIONSTERTIARY EDUCATION SYSTEMTERTIARY ENROLLMENT RATETERTIARY INSTITUTIONSTOTAL DEBTTRANCHETRANCHESTRANSFER PAYMENTTRANSPARENCYTUITIONUNDERGRADUATE DEGREE PROGRAMUNDERGRADUATESUNEMPLOYMENTUNIVERSITIESUNIVERSITY DEGREEUNIVERSITY ENTRANCEUNIVERSITY STUDENTSVETERINARY MEDICINEWRITTEN COMMUNICATIONSWorld Bank10.1596/12954