Summary

1

Private Sector versus Ministry of Education in
Brazil crisis of growth or a mistaken policy
environment?

• Summary
• General features some public-private contrasts
• Consequences of Growth
• Regulation troubles
• Conclusion
• Maria Helena de Magalhães Castro
• IFCS / UFRJ - Brazil
• necastro_at_globo.com

2
Some General Facts (1968-1995)

• University Reform of 1968 set the model
• public sector with top quality (inspired on US
  Research Universities) free of charges. There
  is at least one federal and one state-level U. in
  each of the 25 states.
• Scientific research and graduate programs are
  almost exclusive to the public sector ( to old
  confessional universities) and count with
  competitive funding, programs evaluation by peer
  review, etc.
• private sector with supplementary role
  (demand-absorbing teaching institutions), without
  academic autonomy, and not eligible for public
  programs moneys (except for a small student aid
  program -FIES). PHEIs charge real prices.

3
The 1996 LDB Law

• all licenses for institutions and teaching
  programs are now temporary and subjected to
  evaluation
• latest expansion through private sector was
  promoted by
• a granting academic autonomy (licensing
  existing Faculdades Integradas to become
  Universities or Centros Universitários) and
• b liberalization of licenses for new PHEI, but
  leaving all PHEIs on their own
• differentiation of institutional profiles and
  teaching programs (3-year technologic and 2-year
  sequencial ) - helps expansion, as well.

4
Cardoso (1995-2002) Lula (since 2002) policies

• Establishment of a comprehensive evaluation
  system for HE (now SINAES) - well advanced for
  teaching programs, but not for institutions.
• evaluation of courses and students by Provão/
  now ENADE (national exam for college graduates)
  and two types of in site peer reviews on
  teaching conditions for course authorization and
  reaccredidation.
• Improvement of information about the HES for
  policy-makers (not for the public) through
• evaluation mechanisms (reports, questionnaires)
• annual census (reviewed, but still not audited)
  
• Sied-sup (integrated federal database for HE)
• institutional catalogs 2005 Decree imposes
  publication on the web

5
Expansion

• From 1997 to 2003 admissions to private higher
  education grew 154, or 17 per year, in average.
  Enrollments expanded 132, or 15 per year.
• In 2003 the PHE sector accounted for 74 of
  enrollments and for 92 of HEIs, but offers a
  limited variety of courses - mostly in Applied
  Social Sciences.
• Expansion process was unplanned and
  ill-assisted, provoking concentration, fast
  saturation, dumping other wild behaviors
• In 2002 PHE moved around R17 billion in
  expenses and R16 billion in revenues a big
  economic sector in equal conditions to the
  communications and transportation sectors

6
Expansion by Enrollments in the Public and
Private Sector
7
Number of HEIs by size and sector (2002)
8
Concentration happens among universities
9
Geographic reach of top largest private
universities
10
Brasil HE System in 2003

11

• Equity problems
• democratization of access, but not of graduation
• insufficient financial aid, despite new
  affirmative action / ProUni
• high asymmetry of information (official, media,
  research)
• undesirable market dynamics uninformed choices
  (1st generation ranges from 33 in Medicine to
  93 in Education. It is higher than 80 in eight
  careers (Nursing, Chemistry, Math, History,
  Accounting, etc.)
• Quality problems
• talk chalk evening courses absorbs 70 of
  PHE sector's students
• no commitment to faculty (paid by the hour with
  no voice)
• total ignorance about graduates acceptance by
  the job market and views about the education they
  received.

12
Equity graduation rates do not follow expansion
of incoming studentsobs academic demands are
low
13
Some Quality issues
14
Saturation

• Growth rate dropped from 17 to 8 in 2003 and
  down to 5 in 2004.
• In 2003 there was already a 30 idle capacity
  (unoccupied vacancies).
• Today, growth of one PHEI means losses for
  others.
• But this market will keep receiving newcomers
  who do have good chances, if they bring any
  quality differential.
• The vast majority of PHEIs are a commodity -
  they do not differentiate from one another and
  are in quite fragile position to compete in
  quality. The moment of the truth is coming.
  Bankruptcies will be inevitable, particularly
  among the small PHEIS.

15

• Crisis of growth?
• Yes, abundance of demand allowed for much
  amateurism and the pattern of growth - new giants
  (autonomous PHEIs) pulverization of small ones
  -raised government's costs to regulate (get it
  right) and enforce regulation
• market may adjust by itself
• a autonomous PHEIs are learning to be large,
  but are in a position to shift focus from growth
  to quality
• b quality niche is unoccupied and may be the
  future edge. Cost-reduction (professors, class
  size, horizontalizacion, etc.) is not an
  alternative anymore inept PHEIs will die.
• government reaction micro-regulation of
  academic activities which led to a cat-and-rat
  game. Not an effective fixing-up, but evaluation
  may help a lot.
• new actors (businesses) emerged, toughening
  PHEI-Gov rels.
• services in law consultancy for cost reduction
  management marketing rental services of
  multi-purpose labs libraries.

16

• Mistaken policy framework?
• a non-integrated higher education system 3
  worlds unfairness
• Public autonomy, reputation, big voice, plenty
  of programs funding
• Private autonomous none of the above big
  actors versus ever-changing rules
• Private non-autonomous hard life, no control
  over its own school
• a too centralized authority which
• allows for discontinuities, raises cynicism
  blocks learning from experience
• precludes self-regulation, stimulates
  self-interest defensive behavior
• overwhelms MEC implementation enforcement
  surpass its capacity
• legislative fury over minutiae lack of grip
  over owners new actors
• maintainers are out of reach in nonprofit
  entities that are supposed to earn money to self
  sustain and have independence from State

17
Regulation of Higher Education (1997-2005)another
big source of asymmetry of information
18

• Some views proposals
• more Congress, less Executive regulation focus
  on verification of outcomes (Moura Castro)
• adopt a framework for economic regulation treat
  as business, address market failures and property
  concentration punish dumping, define
  relationship between owners and PHEIs, etc.
  (Nunes)
• there is much space for self-regulation which
  will create opportunities to bring government to
  negotiate and, perhaps, work together (Franco)

19
Current Issues

• HES remains undersized. Expansion depends on
  financial aid. Private long term credit is new
  and too small. State level fellowships too.
  Official FIES system insufficient and ill
  designed.
• Financial aid needs to be fully redesigned so to
  address operational costs and default rates.
• HES remains opaque for the general public feeding
  dropout rates and many other inefficiencies
• A major role of the State is to minimize
  asymmetry of information with production and
  dissemination of good data and analyses, as well
  as facilitating informed debate creating forums
  and other opportunities

20
Some current issues

• Provão and other evaluation instruments show
  serious quality problems in curricula,
  teaching-learning, placing graduates, etc.
• quality will follow informed debate and
  engagement of HE community other stakeholders.
• 4. Dilemmas are how to integrate different
  sectors into one project and how to regulate the
  market.
• The scenario is one of a heavy State wild
  Market low engagement of HE community and
  other stakeholders in policy design and
  implementation.

21
Some current issues
Market is too referred to the State (as opposed
to the HE, their students and own institutions).
Much energy and moneys are wasted in lobbying and
in defensive behaviour (anticipating MECs next
move, building facades learning how to bend or
evade from the last regulation, etc.). Owners
and/or Rectors are not on top of their own
schools, nor are they acquainted with what is
going on in HE around the world (self-regulation,
evaluation, data coordination, collaboration,
etc.). HE community did not develop public
responsibility and got more segmented,
competitive and defensive. Divorce between public
(Oxbridge scholars) and private (merchants)
sectors continues.
22
Quality issues Provão results (2000)