Modeling the Allocation of Free-Tuition Slots at Chilean Institutions: Access Versus Graduation

• In Event: Free-Tuition Policy, Support Programs, and Academic Performance: Lessons for Increased Equity in Chilean Higher Education

Abstract

The recently implemented free-tuition policy in Chile provides free education for the 60% of students with the lowest family income. In 2016 free tuition accounted for 26% of the benefits and by 2019 it reached 63%. The benefit only lasts during the nominal program length, which is problematic since on-time graduation rates in Chile only reach 16% of enrolled students.

Literature suggests that while free higher education allows financial access, the real costs associated to postsecondary education is not entirely taken care of by this policy. Students and their families will most likely face extra costs that they might not have contemplated beforehand. Therefore, this could affect their real chances of completing a tertiary degree (Adrogué & García de Fanelli, 2018; de Gayardon, 2019; Dynarski & Scott-Clayton, 2013; Psacharopoulos & Papakonstantinou, 2005). Additionally, it is not clear if free tuition initiatives can be sustained since these programs depend on continuing funding that should consider possible increases in education costs (Perna, Leigh, & Carroll, 2017).

This study aims to model the decision that institutions in Chile face when deciding how to allocate free-tuition slots whilst considering graduation rates in order to maximize institutions overall utility. We propose the Cobb-Douglas utility function to interpret our optimization problem and search for the optimal solution where the utility for the HEIs is maximized. Results will help to inform individual institutional decisions. They will also help to better understand the trade-offs faced by institutional authorities when implementing financial policies aimed at increasing access. The lessons learned may illuminate future discussions about free-tuition and student financial aid in Chile and in countries around the world.

Authors

• Pamela Guzmán, Pontificia Universidad Catolica de Chile

• Maria Veronica Santelices, Catholic University of Chile