CHILE INVESTS IN EDUCATION AND HEALTH CARE

2006 Budget Submitted to Congress

(Sept. 15, 2005) Chile’s Finance Ministry submitted the 2006 budget to Congress on Wednesday, continuing the socialist administration’s agenda for increased spending on health and education. The new budget reaffirms President Ricardo Lagos’ efforts to promote development and advance Chile’s international standing.

According to figures released by the Finance Ministry, the new budget will increase government spending by six percent, the highest increase since 1999, and, as expected, will focus on health and education.

In 2006, the government will increase spending on health care by 11 percent, focusing on doctor visits and primary services. A large portion of that funding will be directed towards costs associated with President Lagos’ new state health system, “Plan AUGE,” which aims to provide universal health care coverage for all of Chile’s people (ST, August 3).

More than 200,000 Chileans have benefited from the plan since its inauguration in July. With the new investment into health, the number of illness covered under AUGE will increase by 15, with a total of 40 illnesses now covered under the plan.

At the beginning of his presidential term in 2000, Lagos promised to increase spending on healthcare by 25 percent. In Lagos’ final budget, the new figures represent an 18 percent increase in healthcare spending since he took office.

In tandem with Plan AUGE, the current government’s priority has been improving the nation’s education system. In 2006, general education funding will increase by 10 percent, while appropriations for higher education will increase by 24 percent.

The budget emphasized a plan for a new program, to be implemented during the 2006 school year, which would provide the nation’s poorest 60 percent with funding to attend university.

Minister of Education Sergio Bitar, who presented the plan on Tuesday, explained how the system will work to improve national access to higher education. The plan creates a system of financial guarantees for eligible students to cover higher education expenses. While most grants will go to students who plan to attend 25 of the nation’s largest universities, the law also provides funding for students who will attend private universities, trade schools, and other professional institutes.

At a ceremony with many university representatives, President Ricardo Lagos signed the education initiative into law. “Every deserving student will have access to higher education,” the president said. “This achievement is unparalleled since the transition to democracy.”

Student leaders present at the ceremony praised the government for its efforts to make higher education more accessible, celebrating the event as a major victory for students everywhere.

Support for the program increased after the government made concessions to the Federation of Chilean Students (CONFECH), which staged a series of demonstrations in April and May to highlight inequalities within the old system and the proposed new one. Government officials agreed to sit down and negotiate with student groups after several protests turned violent. The cooperation between education officials and student groups came as a surprise to students and university officials, as the government had previously refused to consider any of the group’s demands.

Education officials announced that the new education initiative will be based on university entrance exams and family income. Students who achieve at least 550 points on their university entrance exam (PSU) and whose family income is less than 60 percent of the national average will receive a fixed amount of money from the government to pay for their university studies. Any expenses above this amount can be financed through government-backed loans repayable at low interest rates.

Students whose PSU scores are at least 475 and meet income requirements will also be eligible for government loans and lines of credit guaranteed by the state.

The plan also provides aid for students whose families earn between 60 and 80 percent of the national average. Students from these families can apply for government loans to pay for up to 90 percent of their education expenses.