Financing for equity in higher education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students
4. Support for students' living costs
Introduction
Key financing indicators (UIS Data)
In 2023, for tertiary education, the gross enrolment ratio for tertiary education for both sexes was 104.73%, while the initial government funding per tertiary student as a percentage of GDP per capita was 19.59%. The initial household funding per tertiary student as a percentage of GDP per capita was 17.76%.
Tuition-free status
Higher education is grounded in the principle that access should be based on merit and ability, without discrimination. Law 21.091 establishes criteria for public funding, stipulating that accredited universities and technical institutes that adopt inclusive access policies at least one year prior to application, and that provide support to vulnerable students, are eligible for free education funding.
Governance
The governance and funding of higher education in Chile have been restructured following the enactment of Law 21.091, which established the Subsecretaría de Educación Superior (Undersecretariat of Higher Education). Operational since 1 August 2019, it succeeded the former Higher Education Division of the Ministry of Education. The Undersecretariat collaborates with the Minister of Education to shape national higher education policies and programmes, propose the allocation of public resources, and oversee the management of financial instruments supporting the sector.
1. Education resources to subnational governments
Funding is transferred directly to institutions, bypassing local government intermediaries. To qualify for free-tuition funding, institutions must ensure that at least 20% of their student body comes from the lowest-income households.
2. Education resources to institutions
Funding for private universities in the absence of public institutions
Under Law No. 21.091, eligible private universities can receive free tuition subsidies. These include non-state private universities listed in Article N° 1 of DFL N° 4 of 1981, as well as private universities accredited for at least four years that are established as non-profit private entities, public law corporations, or other recognised public law entities.
Allocation and equity
Each year, the Undersecretariat of Higher Education determines the funding amount allocated to each institution participating in Chile’s free tuition system. Allocations are based on regulated fees, basic tuition fees set by the Ministry of Education, and the number of enrolled beneficiary students, using data from at least the past three years. This mechanism promotes equity by targeting resources to institutions according to the number of students benefiting from free tuition.
In 2024, the Government proposed the Financing for Higher Education (FES) as a new instrument to replace the State-guaranteed Credit (CAE), which has yet to be approved. The FES will include direct transfers to institutions in addition to student transfers, with institutions already in the free education system automatically incorporated.
3. Education resources to students
Admission for vulnerable groups
The “special admission” mechanism targets higher education applicants from diverse backgrounds, including foreigners, indigenous peoples, individuals with disabilities, and graduates from technical-professional schools. It forms part of broader admission and financial support policies designed to promote inclusion and equity for vulnerable students. Applicants under this mechanism are selected using general access criteria or alternative requirements that differ from regular program admissions. Each university manages its own special admission track, so application deadlines, required documentation, and selection procedures vary across institutions.
Scholarships, grants and loans for vulnerable groups
Tuition Scholarships
Most of Mineduc's tuition scholarships target students entering their first year of higher education and are not exclusively targeted at low-income students, as socio-economically vulnerable students are primarily supported through the Gratuidad policy, as these students are supported under the free tuition policy. Additional benefits exist for students already enrolled, including special quotas for students with disabilities, those with a high school grade point average of 5.0 or higher, and financing opportunities for foreign and indigenous students pursuing higher education in Chile.
University Credit Solidarity Fund and CAE
Students who do not meet the requirements for a tuition scholarship can access financial support through theFondo Solidario de Crédito Universitario (University Credit Solidarity Fund) or the Crédito con Garantía Estatal(CAE). The Solidarity Fund is available to students from the lowest 80% of the country’s income population and provides loans up to the full reference fee for their degree program in UTM. In contrast, the CAE, established in 2014, has no socioeconomic restrictions and is granted through a loan in UF from a financial institution, which can complement scholarships or the Solidarity Fund until the full cost of the degree is covered.
Financing for Higher Education (FES)
Chile is currently discussing a legislative proposal to replace the State-Guaranteed Credit (CAE) and other student loan mechanisms with a new public financing instrument known as Financing for Higher Education (FES), as part of the ‘Fin al CAE’ policy agenda.
The proposed Financing for Higher Education (FES), still pending approval, would replace both existing credit instruments. Unlike the current loans, the FES does not generate formal debt, involve banks, or require interest, collateral, or guarantees. It covers the formal duration of the degree plus one additional year, allowing a single career change, which extends coverage to 1.5 times the duration of the longest career plus one additional year. By eliminating co-payments for students up to the ninth income decile, the FES provides financial support for all students in need, without socioeconomic or PAES score requirements. Students must enroll in an affiliated institution, apply for assistance, and commit to repay the funds once employed. Those currently using the CAE or Solidarity Fund are also eligible to transition to the FES.
4. Support for students’ living costs
The Ministry of Education, through the National Board of School Aid and Scholarships (JUNAEB), provides financial aid to higher education students to help cover living expenses, particularly for those from vulnerable backgrounds or who must travel to attend their studies. These grants support costs such as food, lodging, transportation, and other related expenses. Additionally, Mineduc offers complementary benefits that contribute specifically to study-related needs, including food and accommodation.
This profile was reviewed by Diana Vásquez Orjuela, from the Academic, University of Talca.
