Edition 158 - June 2014

The Brazilian job: More students, more private universities, more loans

This month 653 992 Brazilian students applied for the second edition of the ProUni scholarship scheme, which is a 50% increase from 2013. The total number of awarded scholarships is 115 101, out of which 73 601 are full and 41 500 partial. ProUni is a programme established in 2005 by the Brazilian government which offers full or partial scholarships to lower income students to study in private universities. It is one of a few government programmes that provide financial assistance to students who pay tuition fees. It is also a government’s way to deal with the high demand in higher education.

Within ten years (2002 - 2012) the number of students in Brazil has doubled to almost 7 million. Out of this number, 5.3 million (around 75%) study in private institutions. Public universities, which are tuition free, cannot cater for the growing student population and, besides, they seem to be reserved for the better-off students coming from private secondary schools. So what the Brazilian government has been doing in the past years is turning to private universities in order to meet the increasing higher education demands. 

Knowing that employees with a university degree earn more than 2.5 times as much as the ones with only a high school degree, it is not surprising that the student population is increasing rapidly even at the cost of jumping into the loan scheme. Besides the ProUni scholarships, many students rely on the Fies programme, which provides subsidised loans at a 3.4% annual interest rate. 

In the last several years, Brazil has been quite a dynamic higher education market, with many mergers, acquisitions, buying and selling spree among several major higher education providers. As reported by the New York Times, the ten biggest among them provide higher education for some 2.5 million, or almost 35% of all the students in the country. Kroton Educacional and Anhanguera Educacional, two largest for-profit universities in Brazil, are soon to be merged. Once this happens, the new blend will be the world’s largest for-profit publicly-traded higher education company, worth more than USD 8 billion (EUR 5.87 billion) and with more than a million students. 

Public universities are still in better esteem for quality and a preferred option among students, but fierce competition and much fewer places they offer make students opt for the placements at private institutions. Although private universities are improving their ranking on national standardised tests, the doubts remain in academia about the quality of teaching given that the supervision by the government is considered very weak and there is not enough data on the education provided by private institutions. 

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