Subsidies to private schools: the State invests more in the poorest students, but they ask for greater transparency

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For each 100 pesos that the State invests in a state school studentdestined 55 pesos still private subsidized school student, according to 2021 data (the latest available). In this management sector, spending per student increased 10% compared to 2018 (when 50 pesos were invested for every 100 destined for students in state schools), possibly due to a drop in enrollment in subsidized private schools and migration to state sector.

According to the report “Subsidies to private education: For what and for whom?”, from the Observatory of Argentines for Educationthe mechanism of subsidies – transfers from the provinces to private schools – means that The State invests more in the poorest students. While state-run schools receive students from lower socioeconomic backgrounds, private schools with subsidy receive, for the most part, students with lower socioeconomic backgrounds than privately run schools without subsidy.

In high school, In decile 1 (the poorest 10%), almost all students (95.1%) go to state-run schools, and only 4.6% to subsidized private schools. At the other end, in the 10th decile (the richest 10%), only 7% go to state-run schools74.3% to subsidized private schools and the remaining 18.7% to non-subsidized private schools.

In terms of financing, these data imply that For the poorest decile of students, 98% of the cost of education is financed by the Statewhile for the richest decile the figure drops to 48% (almost half of what was invested in a student from decile 1), according to the document prepared by Mauro Moschetti (Autonomous University of Barcelona), Martín Nistal and Leyre Sáenz Guillén ( Observatory of Argentines for Education).

At the national level, State-run schools bring together 73% of students (from room 3 to the end of secondary school), while the 22% of students go to privately run schools with subsidies, and 5% to private schools without subsidy. The three jurisdictions with the highest proportion of students in the subsidized private sector are CABA (39%), Córdoba (29%) and Buenos Aires (26%). At the other extreme are Jujuy and Chubut (both with 9%).

Proportion of secondary school enrollment in each management sector by SES decile (left). Proportion of the cost of education financed by the State in each decile (right). Source: Observatory of Argentines for Education
Proportion of secondary school enrollment in each management sector by SES decile (left). Proportion of the cost of education financed by the State in each decile (right). Source: Observatory of Argentines for Education

In Argentina, the transfer of state resources to private schools was regulated for the first time in 1947, during the presidency of Juan Domingo Peron, through Law 13,047. Then Decree No. 9247 was added during the government of Arturo Frondiziwhich recognized the public nature of private education and created the National Private Education Service, and decrees 15/64 and 371/64 during the presidency of Arturo Illia, which established norms and criteria for allocating subsidies, intended to cover a portion or all of teaching salaries. The system acquired its current form during the government of Carlos Menem with Decree No. 2542 of 1991, in force until today.

According to current regulations, the free private schools belonging to non-profit public good entities can receive state subsidies that cover up to 100% of spending on teacher salaries. Instead, the schools that charge fees They are categorized into three groups, according to the quotas, which imply the possibility of accessing different percentages of subsidy (category A, 80%; category B, 60%; and category C, 40% subsidy).

The scheme of state financing of private education provision It is not common in other countries: in addition to Argentina, it works in Spain and Australia, he explained Mariano Narodowskiprofessor at the Torcuato Di Tella University, to Infobae. And he asked: “Why does the Argentine State subsidize private education? Because that allows the price of school fees to be lowered, and in this way decompresses state education. The Argentine State needs private education to guarantee the right to education through the private spending of families.”

“If all families chose to exercise their right to a place for their children in state education, the educational system would collapse due to lack of funds and infrastructure, even adding all the subsidies to private schools to the budget,” Narodowski added.

Public educational expenditure per student in the subsidized private sector, for every 100 pesos of expenditure per student in the state sector. Years 2018 and 2021. Source: Observatory of Argentines for Education
Public educational expenditure per student in the subsidized private sector, for every 100 pesos of expenditure per student in the state sector. Years 2018 and 2021. Source: Observatory of Argentines for Education

Specialists usually highlight at least two advantages of the private education subsidy system: on the one hand, diversifies the educational “offer” and enables lower-income families to choose a private school whose fee they would not be able to pay if they did not receive a subsidy; On the other hand, in a context of fiscal restrictions, it allows guarantee the right to education for all with a lower investment from the State.

Veronica Gottau, researcher at the Torcuato Di Tella University, said: “Paradoxically, increasing the proportion of the provincial budget that is allocated to transfers to the private sector reduces state spending on education because it implies that a part of education expenses is assumed by families. Thus, for example, instead of investing 100, the State invests 60 and the remaining 40 are financed by each family group. That is to say, The State with less money educates more students. If you do more with less, then the system is efficient.”

“As a society we owe ourselves the debate about why only 12.5% ​​of public funds are invested in privately managed schools, when It is the least expensive option for the State in terms of resource use per student. At the same time, it fulfills the dual purpose of ensuring families access to moderate fees and teachers the minimum salary level determined by each jurisdiction," he said. Martin Zuritarepresentative of the sector, for his role as executive secretary of the Association of Private Education Institutes of the Province of Buenos Aires (AIEPBA).

The main criticism that the system usually receives is that it tends to consolidate inequalities: different social sectors attend differentiated school circuits, which increases segregation. “The three-sector system (public, subsidized private and unsubsidized private) contributes to the social segregation of schools based on the socioeconomic level of the families and not only on the intergenerational reproduction of inequality, but even on the widening of differences,” he stated. Jason Beechprofessor at the University of Melbourne and the University of Saint Andrew.

“In a society in which inequality has grown so much in recent decades, educational policies and public investment should be aimed at promoting greater equality and making schools a meeting space to contribute to social cohesion”Beech added.

Distribution of enrollment in each management sector (2021)
Distribution of enrollment in each management sector (2021)

Another critical point that emerges from the Argentinos por la Educación study is the lack of transparency in the allocation of subsidies. The guidelines to define which schools receive subsidies are diffuse, the decision is not made by bidding or competition and, in some jurisdictions, the signature of the Minister of Education is not even necessary: ​​a resolution from the provincial directorate of Private Education is enough.

“There are no – and never have been – exhaustive criteria to determine why one private school would be eligible to receive a subsidy and another would not. The regulations refer in very general qualitative terms to the socioeconomic profile of the population served, the location of the establishment, among others. criteria that allow for great discretion when defining the allocation of subsidies,” he said Mauro Moschettione of the authors of the report, to Infobae.

For Moschetti, going forward it would be important to “review the experience of other countries with similar systems that in recent decades have made efforts to explain the assignment criteria using objective indicators”. To have these indicators, it would first be necessary to have a socioeconomic profile of the students of each school: “In Argentina there is a historical deficit in administrative data on the school populationto which is added the lack of integration of information between the public and private subsystems,” continues Moschetti.

“Unfortunately, the information surrounding subsidies is tinged with opacity in the country. We still have a long way to go to know to whom and why this financing is granted to private establishments. In addition, There is a lack of studies that investigate how much families pay for their children's education. "The document contributes to a discussion that we owe as a society and that only appears spasmodically from time to time, and when it does, it is more based on preconceived positions than with empirical support," he stated. Alejandro Morduchowiczspecialist in educational planning.

Some voices have pointed out that the current subsidy scheme for private schools works in practice as a “voucher” system. Specialists clarify that vouchers and subsidies are, in reality, opposing mechanisms. "The subsidies or contributions to private schools are a mechanism of financing of educational offer; he voucherOn the contrary, it implies family financing (the demand), who can take their voucher to the school of their choice,” explained Mariano Narodowski.

In a voucher system like the one proposed by the leaders of La Libertad Avanza, the idea is that schools (state and private) compete for enrollmentsince it is the students who provide the financing.

“It is not possible to finance demand and supply at the same time. In some voucher systems, such as New Zealand, private schools may charge a 'co-pay'. In ChiliHowever, private schools that receive vouchers are prohibited from charging families a fee, following a reform promoted by former president Michelle Bachelet. There, only schools that do not receive vouchers are charged,” Narodowski continued.

“In theory, the resources that go to schools are based on the number of students they have. Therefore, The final result (with state contributions to private schools or with vouchers) should be similar in both systems,” said Alejandro Morduchowicz. “It should also be noted that currently subsidies to private schools are to finance staff. A voucher system should consider all operating expenses, not just personnel costs,” he added.

Could the two mechanisms coexist? For Morduchowicz, a priori, yes. But he clarified: “From a conceptual point of view, the questions we should ask ourselves are why both systems should coexist, and what would be the objective of the voucher in such a case. If they did, they would denature the idea of ​​competition of the voucher: It is not what its promoters intend. On the other hand, from an administration point of view, this coexistence would only add more distortions to those that already exist, further complicating management.”

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