Economics of education
Passive privatization and financial crisis of public higher education in Colombia
La privatización pasiva y la crisis financiera de la educación superior pública en Colombia
A privatização passiva e a crise financeira do ensino superior público na Colômbia
Por: 1Luis Hernando Portillo Riascos
1Ph.D. in Economics, Complutense University of Madrid, Spain. Faculty Member at the Department of Economics, Universidad de Nariño. ORCID: 0000-0003-3362-6934. E-mail: luishernando@udenar.edu.co. San Juan de Pasto - Colombia.
Received: July 10, 2024 Accepted: November 18, 2024
DOI: https://doi.org/10.22267/rtend.252601.264
How to cite this article: Portillo, L. (2025). Passive privatization and financial crisis of public higher education in Colombia. Tendencias, 26(1), 29-60. https://doi.org/10.22267/rtend.252601.264
Abstract
Introduction: This article examines the challenges posed by the current funding scheme for public universities in Colombia, where there is a clear contradiction between the growing needs of these institutions and the budget allocated by the State for their operation. Objective: The purpose of this study is to analyze the effects generated as a consequence of the passive privatization strategy implemented through Law 30 of 1992. Methodology: The research approach is quantitative, with a descriptive scope. Methodologically, two dimensions are addressed: management and financing indicators. The analysis period spans from 1993 to 2022. The data used mainly comes from databases and reports published by the Ministry of Education. Results: As a result of this research, it was found that, despite the increase in educational coverage over the last three decades, the funding for public universities has been inadequate. Moreover, it was noted that the state’s strategy for providing educational services progressively favored demand-side subsidies at the expense of transfers to public institutions. Conclusions: This situation threatens the sustainability of these institutions while leading to a noticeable deterioration in the quality of service provision.
Keywords: education management; educational autonomy; educational decentralization; education financing; education reform.
JEL: I22; I28; L33; H52; H75.
Resumen
Introducción: Este artículo examina la problemática que supone el actual esquema de financiamiento de las universidades públicas colombianas, en el cual se observa la evidente contradicción entre las crecientes necesidades de dichas instituciones y el presupuesto asignado por el Estado para su funcionamiento. Objetivo: El propósito de este estudio es analizar los efectos generados como consecuencia de la estrategia de privatización pasiva implementada a partir de la Ley 30 de 1992. Metodología: El enfoque de investigación utilizado es de naturaleza cuantitativa, con un alcance descriptivo. Desde el punto de vista metodológico, se abordan dos dimensiones: indicadores de gestión y de financiamiento. El periodo de análisis comprende de 1993 a 2022. La información utilizada proviene fundamentalmente de las bases de datos e informes publicados por el Ministerio de Educación. Resultados: Como resultado de esta investigación, se encontró que, a pesar del incremento de la cobertura educativa durante las últimas tres décadas, el financiamiento de las universidades públicas ha sido precario. Además, se advirtió que la apuesta estatal para la prestación del servicio educativo privilegió progresivamente los subsidios a la demanda, en detrimento de las transferencias hacia las instituciones públicas. Conclusiones: Esta situación amenaza la sostenibilidad de este tipo de instituciones, a la vez que provoca un deterioro manifiesto de las condiciones de calidad en la prestación del servicio.
Palabras clave: administración de la educación; autonomía educativa; descentralización educativa; financiación de la educación; reforma de la educación.
JEL: I22; I28; L33; H52; H75.
Introdução: Este artigo examina o problema apresentado pelo atual esquema de financiamento das universidades públicas colombianas, no qual se observa a evidente contradição entre as necessidades crescentes dessas instituições e o orçamento alocado pelo Estado para seu funcionamento. Objetivo: O objetivo deste estudo é analisar os efeitos gerados como consequência da estratégia de privatização passiva implementada desde a Lei 30 de 1992. Metodologia: A abordagem de pesquisa utilizada é de natureza quantitativa, com escopo descritivo. Do ponto de vista metodológico, são abordadas duas dimensões: indicadores de gestão e de financiamento. O período de análise é de 1993 a 2022. As informações utilizadas provêm principalmente de bancos de dados e relatórios publicados pelo Ministério da Educação. Resultados: Como resultado dessa pesquisa, constatou-se que, apesar do aumento da cobertura educacional nas últimas três décadas, o financiamento das universidades públicas tem sido precário. Além disso, observou-se que o compromisso do Estado com a prestação de serviços educacionais favoreceu progressivamente os subsídios à demanda, em detrimento das transferências às instituições públicas. Conclusões: Essa situação ameaça a sustentabilidade desse tipo de instituição e, ao mesmo tempo, causa uma clara deterioração na qualidade da prestação de serviços.
Palavras-chave: administração educacional; autonomia da educação; descentralização educacional; financiamento da educação; reforma da educação.
JEL: I22; I28; L33; H52; H75.
During the 1980s and 1990s, Colombia joined the trend of several Latin American countries to undertake a series of reforms aimed at deepening commercial and financial liberalization (Economic Commission for Latin America and the Caribbean [ECLAC], 1990, 2002, 2004), in line with the policies promoted by the Washington Consensus. These reforms included economic opening and deregulation, processes that were strongly influenced by the need to modernize the Colombian state and improve its integration into international markets (Gómez, 2021). However, although these policies achieved some progress in macroeconomic stabilization, they also led to significant challenges, such as an increase in inequality and mixed effects on economic growth (Cepeda et al., 2022).
The liberalization strategy meant a revision of the role of the state and its functions, which ultimately led to significant changes in the economic model that had prevailed until then (ECLAC, 1990). In the Colombian case, the so-called “structural reforms” also extended to education (Restrepo, 2006). In general, what was observed was an accelerated increase in the supply and participation of the private sector in higher education, with a public sector that was gradually weakened, primarily due to the financial strangulation it was subjected to. This phenomenon is not exclusive to Colombia, as several countries in Latin America and the Caribbean have been facing significant challenges in terms of public higher education financing, in addition to low coverage, inequity, and other indicators, with large gaps compared to developed countries (López, 2016).
To explore the scope of the aforementioned phenomenon, this research aims to analyze the effects generated in public higher education as a result of passive privatization caused by the implementation of Law 30 of 1992. The fundamental problem of the financing scheme is the contradiction between the growing needs of Colombian Public Higher Education Institutions (HEIs) and the budget allocated by the State for their operation. In this context, this research found that the state’s strategy for providing educational services became increasingly focused on demand-side subsidies rather than strengthening public institutions. Therefore, it is important to examine the consequences of this approach.
The article is organized into four sections, including this introduction. The second section presents a brief literature review, addressing aspects such as financing and management models in higher education. The third section describes the methodology used in this study, along with some of the limitations encountered regarding the topic. The fourth section presents the main results found and their interpretation in light of the literature review. Finally, the most important conclusions drawn from this research are discussed.
Literature Review
There is no doubt about the importance of education in the development of society (Asociación Colombiana de Universidades [ASCUN], 2022). Furthermore, it is a right that citizens have to improve their well-being. For this reason, a fundamental premise is that the State must have all the tools to make this right a reality, without restrictions associated with the socioeconomic situation of its inhabitants (Sen, 2000). Likewise, education should be provided under optimal quality conditions, a principle that demands adequate and sustainable financing for the provision of the service (Brunner et al., 2024; Consejo Nacional de Educación Superior [CESU], 2014). In other words, the right cannot be realized without the means to make it a reality.
From the perspective of Public Economics, education has always been considered a priority good, given the externalities it generates for society as a whole and its effects in terms of social mobility, economic growth, productivity, and competitiveness (ASCUN, 2022; Becker, 1964; Giraldo, 2009; Schultz, 1961). In fact, in several countries, access to certain levels of education has become mandatory. In the same vein, human capital theory has made significant contributions to this field (Becker, 1964; Schultz, 1961). Later, these elements were expanded and deepened within the framework of endogenous growth theories, where the contributions of Barro (2001), Lucas (1988), and Romer (1990) highlight the importance of worker qualifications.
Beyond the positive effects that education can generate, a topic of discussion is who should be responsible for providing this service: the public sector or private agents. Since the 1970s, under the argument of state inefficiency, the position emerged that the participation of the market should be strengthened, and for this purpose, expedient strategies such as privatization were introduced. From then on, a mixed system began to strengthen, which is the one that currently prevails in most Latin American and Caribbean countries (Brunner et al., 2024; Marmolejo et al., 2023).
In the case of higher education, privatization can be understood, as in other activities, in two ways: through the sale of assets (active or direct privatization), or by worsening the financing conditions of public HEIs (passive privatization), which means a progressive reduction in the contributions made by the state (transfers), and the obligation for institutions to seek other alternatives to generate their own resources (Castelao, 2021; Córdoba, 2014; Galindo et al., 2015; Giraldo, 2009). This second scenario is what has occurred in Colombia since 1991, a thesis argued in this research; something similar to what has been happening in other Latin American countries (Brunner et al., 2024; Marmolejo et al., 2023).
Passive privatization implies a gradual deterioration in the conditions under which the educational service is provided, a decline in the quality of education, labor precarization, evident financial suffocation, and a process of commercialization of public education; which leads public HEIs, particularly universities, to use criteria similar to those employed by private agents (Castelao, 2021; Giraldo, 2009).
Beyond the public vs. private debate, there is also a controversy regarding the management models of public higher education (Abadía et al., 2020; Brunner et al., 2024; Chapman, 2006; Domínguez, 2018; Ministerio de Educación, 2022). At one extreme is the centralized model, where the national government (central or federal) transfers the resources to finance these institutions, and at the other is the decentralized model, which combines allocations from local or subnational governments and other actors in society. However, there are intermediate positions, which combine both central government contributions, resources from territorial or subnational entities, and contributions from other types of agents (Brunner et al., 2024; Ministerio de Educación, 2022; Organisation for Economic Co-operation and Development [OECD], 2019). Therefore, in the last two decades, there has been intense debate worldwide about the financing of public higher education (Domínguez, 2018; Ministerio de Educación, 2022).
On the other hand, the State's budget allocation to public HEIs is not homogeneous, meaning there are various criteria, instruments, variables, and parameters involved (Brunner et al., 2024; Ministerio de Educación, 2022). However, in general, the financing of higher education can be summarized in terms of two mechanisms: subsidies to supply and subsidies to demand, although a combination of both may exist (ASCUN, 2022; Brunner et al., 2024).
In the case of subsidies to supply, resources are transferred to the HEIs, which are responsible for providing the service and covering the associated expenses and investments required to fulfill their core functions. Additionally, part of these allocations may be recurrent or structural, with the rest being temporary, such as through formulas, competitive funds, or discretionary grants. From a theoretical standpoint, subsidies to supply represent a position where the State assumes the responsibility of financing higher education, prioritizing the defense of the fundamental right to access the educational system.
Regarding subsidies to demand, the State directly allocates resources to students, who use them to cover the costs of higher education (tuition, and living expenses, among others). Grants can be provided through transfers or loans (Abadía et al., 2020). In some countries, among the alternatives for providing subsidies to demand, income-contingent loans are also considered, with various modalities (Chapman, 2006; OECD, 2019).
Unlike subsidies to supply, in demand-side subsidies, the "autonomy" of the student to choose the institution where they will study prevails (Giraldo, 2009; Molina, 2002). In the case of private HEIs, families and society are responsible for contributing financial resources to cover educational expenses. In many cases, this context leads to an increase in family debt. On the other hand, the freedom to choose is restricted if the public supply is insufficient. Moreover, the restriction is greater if the State does not guarantee the means for public HEIs to provide services with quality standards. Politically, this position implies that the State ends up shirking its responsibility to society (Giraldo, 2009). Furthermore, since institutions enter into competition to attract students, this practice represents a concrete mechanism for the commercialization of public goods provision (Giraldo, 2009; Molina, 2002). Ultimately, depending on how society values education, incentives will either favor supply-side benefits (collective benefits) or demand-side benefits (individual benefits) (Balcão, 2020; Ministerio de Educación, 2022; Tandberg, 2010; Viaene & Zilcha, 2013).
The prevalence of one model over the other has changed over time. Until the late 1970s, States assumed much of the financing of higher education (Ayala, 2010; Ramírez, 2014). However, within the context of liberalization policies applied in Latin America, this responsibility was gradually limited, giving rise to a system where the market predominates (Ayala, 2010; Brunner et al., 2024; Castelao, 2021; Domínguez, 2018). This new framework led public universities to seek alternative ways to increase their revenues, such as charging tuition fees, providing services and commercializing certain goods, consulting for both public entities and private companies, offering postgraduate programs, and patents, among others (Abadía et al., 2020; Brunner et al., 2024; Marmolejo et al., 2023).
In this context, public universities, like those in the private sector, began to be guided by cost-benefit relationships. Clearly, the fact that the State neglects the financing of higher education is contradictory, mainly because this service is conceived as a public good, which, therefore, generates significant benefits for development and economic growth. In the Latin American context, López (2016) argues that universities are in crisis, not only in terms of financing, where restrictions are evident, but also in accreditation, management, and even the very conception of these institutions.
In Colombia, with the 1991 Political Constitution, a mixed higher education system was conceived, where both the public and private sectors coexist (Ministerio de Educación, 2022). Under this framework, higher education was considered, on the one hand, as a fundamental right of citizens, but on the other, it was defined as a public service, the responsibility for which is shared by the State, society, and families. In line with other norms stemming from the Constitution, Law 30 of 1992 was issued, "which organizes the provision of higher education services in Colombia," a regulation that marked a turning point for higher education in the country.
After three decades of the application of Law 30 of 1992, several challenges have emerged. In the case of public universities, the issues generally arise in the areas of financing, coverage, quality, working conditions for teaching and administrative staff, large disparities between universities, weaknesses in regionalization, deterioration of infrastructure, laboratories, and growing requirements for academic practices and research activities (CESU, 2014; Lancheros & Mora, 2022; Sistema Universitario Estatal [SUE], 2021, 2022). To understand the described dynamics, it is essential to investigate the financing model of public HEIs, particularly universities.
The information used in this research comes from databases and reports published by the Ministry of Education, particularly the Sistema Nacional de Información de Educación Superior [National Higher Education Information System] (SNIES), which were complemented with statistics from entities such as the Economic Commission for Latin America and the Caribbean (ECLAC), the United Nations Educational, Scientific and Cultural Organization (UNESCO), the World Bank, and the OECD. Additionally, the database of transfers made to public universities since 1993 was used .
Based on the information available in various documents and databases, the time series for the period 1993-2022 were merged. However, in some cases, a longer period was considered, but only when this was possible. The two dimensions examined in this study are management and performance indicators in the educational sector and financing. In all cases, the emphasis was placed on the contrast between public and private institutions, which aligns with the structure under which this research is developed. In the financial dimension, the focus was on supply-side subsidies, particularly the allocations to public universities.
On the other hand, some proxy variables were used to measure the participation of the public sector in higher education, highlighting total expenditure, private sector expenditure, and the historical per capita allocation in public universities. Complementarily, two variables were employed to address the issues faced by HEIs: the number of teaching positions by type and the type of employment contracts.
From a financial perspective, the analysis did not include the contributions from local entities to public universities, which are minimal, nor the own revenues (undergraduate and graduate tuition fees, service sales, among others), nor other resources such as stamps, co-financing funds, or the occasional allocations made under the implementation of projects from the Sistema General de Regalías [General System of Royalties] (SGR), for both infrastructure and research projects.
Finally, the information on the financing of higher education, as well as other variables included in this research, refers only to the undergraduate level and, at the institutional level, to public universities.
Overview of Higher Education in Colombia
The economic and social development of a country depends on various factors. However, there is consensus that education is one of the most important. In general, countries with higher levels of per capita income tend to allocate a greater proportion of Gross Domestic Product (GDP) to education. In the case of Colombia, despite the increase in higher education coverage in the last fifteen years, the share of public spending on tertiary education, measured in terms of GDP, has been low and has been decreasing. In 2008, 0.86% of GDP was allocated to this level of education, but by 2020, only 0.48% was allocated (Organisation for Economic Co-operation and Development [OECD], 2023). Furthermore, the public sector's share, which is lower than that of the private sector, has also decreased; a phenomenon that deepened during the years 2019 and 2020 (OECD, 2023).
At the beginning of the 1990s, the gross enrollment ratio for higher education in Colombia was below 15%, a rate that was lower than the average reported for Latin America and the Caribbean (Figure 1). Since then, this percentage has been increasing, although it still lags behind the average of developed countries, where the ratio exceeds 75%. In these terms, although the progress is significant, with the enrollment rate now above 55%, there is still a noticeable lag. Additionally, growth has slowed in the last five years.
According to the information published by the Ministerio de Educación (2023a), the number of students enrolled in HEIs has grown significantly, from 447,448 in 1990 to 2.5 million in 2022, which means this variable has multiplied by five, with an average annual growth rate of 5% from 1990 to 2022. Public HEIs multiplied their enrollment by 6.9, with an annual growth rate of 6.05%, while private institutions reported values of 3.8 and 4.15% for this period. By sector, it is worth noting that in 1990, private HEIs already accounted for 60% of total enrollment, a trend that had been strengthening since the 1970s. From that point on, a greater weight of the public sector is observed, reaching similar percentages in relation to private HEIs by 2022, which aligns with the mixed model outlined in Law 30 of 1992.
Figure 1
Colombia: Gross Enrollment Rate in Tertiary Education (%), 1970-2021
Source: Prepared by the author with information from CEPAL (2023).
The number of enrolled students reported in 1993 was multiplied by five. Nevertheless, universities still represent the largest share of the total enrollment, accounting for 53% of students in 2022. This enrollment rate was 24% for university institutions, 20% for technological institutions, and 3% for technical professional institutions. The largest enrollment growth occurred in technological institutions, which increased by 13 times, from 36.800 students in 1990 to 496.000 in 2022. It is important to note that the greatest growth occurred in the public sector, which grew from 12.000 students to nearly 500.000 during this period.
Parallel to the growth in enrollment, the number of contracted faculty also increased. Furthermore, their qualifications have improved (Ministerio de Educación, 2023a). The highest growth in educational level was at the doctoral level, with an increase of 1.370% between 1994 and 2022, from 1.266 professors at the beginning of the period to 18.612 at the end. In percentage terms, while 2% of faculty had doctoral training in 1994, this number reached 12% in 2022. Additionally, the number of faculty with specialization and master's degrees also increased, with rises of 800% and 343%, respectively. In contrast, the percentage of faculty with professional degrees decreased from 51% in 1994 to 20% in 2022. When adding up the various levels of education, in 1994, only 16% of faculty had achieved a master's or doctoral degree. By 2022, this percentage had increased to 55%.
Table 1 shows the information on faculty by HEI sector, typology, and contract modality. This information is relevant because it indicates how these institutions have been hiring their staff. Notably, the modality of hourly contract faculty has increased both in the public and private sectors. In public HEIs, the percentage of hourly contracted faculty grew from 40% in 2007 to 44% in 2022. In private HEIs, these percentages were 28% and 34%, respectively. In contrast, the proportion of faculty with indefinite-term or fixed-term contracts has decreased. For example, in the public sector, full-time faculty represented 33% in 2007, but only 23% in 2022. In the private sector, the percentage remained steady at 14%. Similarly, fixed-term contracts also decreased, from 26% to 21% in the public sector and from 58% to 49% in the private sector.
Table 1
Number of teachers by sector, type of HEI, and contract type
Contract Type / Type of HEI |
2007 |
2010 |
2015 |
2020 |
2022 |
|||||
Public |
Private |
Public |
Private |
Public |
Private |
Public |
Private |
Public |
Private |
|
Technical Professional Institution |
587 |
1.470 |
556 |
1.727 |
582 |
1.525 |
738 |
1.204 |
1.182 |
1.379 |
Hours |
210 |
287 |
422 |
254 |
389 |
206 |
429 |
136 |
716 |
160 |
No report/Occasional |
- |
|
- |
|
|
|
84 |
|
60 |
|
Fixed-term |
214 |
1.160 |
65 |
1.407 |
112 |
1.265 |
56 |
975 |
232 |
1.140 |
Indefinite-term |
163 |
23 |
69 |
66 |
81 |
54 |
169 |
93 |
174 |
79 |
Technological Institution |
898 |
1.364 |
1.170 |
1.599 |
17.442 |
2.124 |
11.829 |
1.717 |
13.325 |
1.464 |
Hours |
96 |
665 |
777 |
569 |
393 |
767 |
1.108 |
490 |
1.053 |
613 |
No report/Occasional |
|
- |
|
- |
|
|
393 |
7 |
576 |
|
Fixed-term |
708 |
681 |
30 |
1.010 |
15.120 |
1.280 |
6.665 |
1.153 |
7.826 |
811 |
Indefinite-term |
94 |
18 |
363 |
20 |
1.929 |
77 |
3.663 |
67 |
3.870 |
40 |
University Institution / Technological School |
2.921 |
9.244 |
6.045 |
13.116 |
8.455 |
21.566 |
10.885 |
24.087 |
10.997 |
23.454 |
Hours |
1.949 |
2.858 |
3.166 |
4.030 |
4.586 |
5.789 |
7.324 |
5.327 |
6.631 |
3.641 |
No report/Occasional |
|
|
|
|
|
|
1.226 |
892 |
1.669 |
748 |
Fixed-term |
647 |
5.616 |
1.871 |
8.342 |
2.769 |
13.882 |
727 |
15.806 |
1.697 |
16.494 |
Indefinite-term |
325 |
770 |
1.008 |
744 |
1.100 |
1.895 |
1.608 |
2.062 |
1.000 |
2.571 |
University |
28.262 |
32.363 |
37.205 |
43.272 |
43.035 |
54.551 |
44.541 |
57.454 |
52.184 |
55.770 |
Hours |
10.650 |
8.608 |
16.998 |
12.298 |
22.709 |
12.521 |
22.547 |
22.196 |
26.050 |
23.329 |
No report/Occasional |
743 |
- |
- |
- |
|
|
5.514 |
1.648 |
6.944 |
1.464 |
Fixed-term |
6.786 |
18.371 |
7.955 |
26.437 |
8.541 |
36.815 |
3.702 |
25.307 |
6.448 |
21.826 |
Indefinite-term |
10.083 |
5.384 |
12.252 |
4.537 |
11.785 |
5.215 |
12.778 |
8.303 |
12.742 |
9.151 |
Total |
32.668 |
44.441 |
44.976 |
59.714 |
69.514 |
79.766 |
67.993 |
84.462 |
77.688 |
82.067 |
Hours |
12.905 |
12.418 |
21.363 |
17.151 |
28.077 |
19.283 |
31.408 |
28.149 |
34.450 |
27.743 |
No report/Occasional |
743 |
- |
- |
- |
- |
- |
7.217 |
2.547 |
9.249 |
2.212 |
Fixed-term |
8.355 |
25.828 |
9.921 |
37.196 |
26.542 |
53.242 |
11.150 |
43.241 |
16.203 |
40.271 |
Indefinite-term |
10.665 |
6.195 |
13.692 |
5.367 |
14.895 |
7.241 |
18.218 |
10.525 |
17.786 |
11.841 |
Total |
32.668 |
44.441 |
44.976 |
59.714 |
69.514 |
79.766 |
67.993 |
84.462 |
77.688 |
82.067 |
Hours |
40% |
28% |
47% |
29% |
40% |
24% |
46% |
33% |
44% |
34% |
No report/Occasional |
2% |
0% |
0% |
0% |
0% |
0% |
11% |
3% |
12% |
3% |
Fixed-term |
26% |
58% |
22% |
62% |
38% |
67% |
16% |
51% |
21% |
49% |
Indefinite-term |
33% |
14% |
30% |
9% |
21% |
9% |
27% |
12% |
23% |
14% |
Total |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
Source: Prepared by the author with information from the Ministerio de Educación (2023a).
In the case of universities, which hired around two-thirds of the faculty in 2022, 38% of the faculty were hired on an hourly basis in 2007; this percentage increased to 50% in 2022 (Table 1). In contrast, the proportion of faculty hired on indefinite-term contracts decreased from 36% to 24% during the same period. Regarding fixed-term contracts, the percentage decreased from 24% to 12%. For private universities, hourly hiring increased from 27% to 42%, a growth of 171%; fixed-term contracts decreased from 57% to 39%, with a 19% increase, and indefinite-term contracts remained around 16%, though they grew by 70% (Table 1).
For university institutions, the situation is more complex, particularly in the public sector. In fact, hourly hiring represented 60% of the total by 2022, and indefinite-term contracts accounted for only 9% in the same year, showing a near-symmetrical contrast with the private sector (Table 1). A similar trend occurred in technological institutions. In technical professional institutions, the public sector predominantly hired on an hourly basis, in contrast to the private sector, where most faculty are hired on fixed-term contracts.
Financial Aspects
The information presented so far shows the growth in enrollment coverage over the past three decades. In general, an increase in enrollment has been observed both in the public and private sectors; however, what has been noticed is that the conditions for service delivery have been deteriorating, particularly due to the form of faculty hiring. Statistics show a progressive worsening of labor conditions for professors, as the majority have been hired part-time, while indefinite-term contracts have decreased. Furthermore, this phenomenon is much more pronounced in the public sector.
To delve into the reasons that explain the previously mentioned situation, it is relevant to briefly mention the funding mechanism for HEIs. In the case of public universities, the main source of income comes from the allocations outlined in Articles 86 and 87 of the 1992 Education Law (Law 30). However, HEIs also capture other income simultaneously, as stipulated in Article 85 of the Higher Education Law. For territorial universities, contributions from municipalities and departments are also counted, as specified in Article 86 of Law 30. Additionally, additional resources have been provided, some of a temporary nature, such as those established in Law 1324 of 2009 or Law 1955 of 2019, and even royalty allocations for science and technology, as well as for infrastructure expansion and improvement, and other permanent resources. These are determined in certain regulations such as Law 1151 of 2007, Law 1371 of 2009 (regarding pension liabilities), Article 183 of Law 1955 of 2014 (regarding quality promotion plans), Law 1819 of 2016 (surplus from cooperatives), and the participation in the collection of the stamp tax for the National University (Law 1697 of 2013).
Regarding the purpose of these allocations, as shown in Figure 2, national transfers to public universities were mostly allocated to operating costs, representing an average participation of 91% between 1993 and 2022. In contrast, investment allocations were minimal throughout the period and only increased starting in 2013, with the implementation of Law 1607 of 2012. In these terms, expenditures other than those allocated for current spending, required to address other needs of public universities—many of which have been increasing—had to be addressed with other funding sources.
Figure 2
Transfers to public universities by concept (%)
Source: Prepared by the author with information from the Ministerio de Educación (2023a).
If the ratio between transfers to public universities and GDP is taken, it has been decreasing after reaching its peak in 1999 (0.6%). However, the percentage is very low, as the average only reached 0.44% of GDP. In the case of operating allocations, while in 1999 they were 0.58% of GDP, by 2022 they had dropped to 0.31%, a percentage lower than that of 1993 (0.39%). In these terms, it is clear that government measures have not aimed at strengthening the financing of public higher education.
Breaking down the information presented so far, it can be observed that the allocation per student has been decreasing over the studied period (Figure 3). While in 1993, in constant 2022 pesos, universities received an average of 11.1 million pesos per student enrolled in undergraduate programs, by 2022, this amount was reduced to 7.6 million pesos, representing 69% of the amount transferred in 1993. In the case of operating allocations, the amount received per student in 2022 represents only 60% of what was reported in 1993. Additionally, the decline was drastic during the 2000-2009 subperiod, remained stable between 2010 and 2018, and showed a growing trend from 2019 to 2022.
Figure 3
Transfers per student to public universities
Source: Prepared by the author with information from the Ministerio de Educación (2023b) and the Departamento Administrativo Nacional de Estadística [National Administrative Department of Statistics] (DANE) (2023).
Another important aspect to mention is that the distribution of resources among public universities is asymmetric, both for operating and investment purposes. In the first case, this is because the policies for expanding coverage have been different over the last three decades. Thus, while some universities decided to enroll more students, despite not receiving higher allocations, others did not follow the same pace. On the other hand, the historical distribution has prevailed, which has been continued since 1993. In the case of investment resources, according to Article 86 of Law 30 of 1992, only national public universities are entitled to this allocation . In contrast, territorial universities, which represented 50% in 2022, do not participate in this income (Figure 4).
Figure 4
National transfers to public universities according to their legal nature, 1993-2023
*The 2023 data is preliminary
Source: Prepared by the author with information from the Ministerio de Educación (2023b).
As shown in Figure 4, until 2012, national universities concentrated almost all of the investment resources. Only since 2013, with resources initially approved by Law 1607 of 2012, and subsequent development plans, was it possible for territorial universities to participate in the investment, although their share has been a third of that allocated to national universities. Furthermore, between 1993 and 2022, while national universities received, on average, 59% of the total, territorial universities received 40% (Figure 4). In this regard, what Law 30 of 1992 generated was a deepening of the gaps between universities, without addressing their historical deficit (Abadía et al., 2020).
Although the distribution of national transfers is asymmetric, which has impacted smaller HEIs more significantly, the central issue lies in the progressive underfunding of public universities. As shown earlier, per-student allocations have been decreasing. Moreover, the resources transferred by the National Government have been primarily aimed at covering operational expenses. Hence, it is essential to understand the implications of what is stipulated in Article 86 of Law 30 of 1992.
Table 2 shows the inflation data and a proxy for the expenses of public universities, represented by the annual adjustment of public employees’ salaries, which include faculty members from public HEIs. This variable helps explain the issue of underfunding in public universities, given that faculty personnel expenses represent a significant percentage of the expenditures of these types of institutions.
The data presented in Table 2 allows us to see that while inflation exceeded public employee salary increases between 1990 and 1999, since 2000, with the exception of 2002, the opposite has occurred. In fact, in the 2000-2022 period, universities accumulated a reduction of more than 15 percentage points in this regard. In the case of the Minimum Legal Monthly Wage (MLMW), the sum of the percentage point differences from 2000 amounted to 37.5.
Table 2
Annual (theoretical) increase in transfers to public universities versus salary adjustments for public employees and the MLMW, 1990-2023
Year |
Salary Increase for Public Employees |
Previous Year's Inflation |
MLMW Increase |
Salary Increase Minus Inflation |
MLMW Increase Minus Inflation |
Additional Percentage Increase Above Inflation |
Inflation + Additional Percentage Increase |
Real Increase (Inflation + Additional Percentage Increase - Employee Salary Increase) |
1990 |
22.2% |
28.1% |
26.0% |
-5.9% |
-2.1% |
0% |
28.1% |
5.9% |
1991 |
22.3% |
32.4% |
26.1% |
-10.1% |
-6.3% |
0% |
32.4% |
10.1% |
1992 |
26.8% |
26.8% |
26.0% |
0.0% |
-0.8% |
0% |
26.8% |
0.0% |
1993 |
25.0% |
25.1% |
25.0% |
-0.1% |
-0.1% |
0% |
25.1% |
0.1% |
1994 |
21.0% |
22.6% |
21.1% |
-1.6% |
-1.5% |
0% |
22.6% |
1.6% |
1995 |
18.3% |
22.6% |
20.5% |
-4.3% |
-2.1% |
0% |
22.6% |
4.3% |
1996 |
17.2% |
19.5% |
19.5% |
-2.3% |
0.0% |
0% |
19.5% |
2.3% |
1997 |
13.5% |
21.6% |
21.0% |
-8.1% |
-0.6% |
0% |
21.6% |
8.1% |
1998 |
16.0% |
17.7% |
18.5% |
-1.7% |
0.8% |
0% |
17.7% |
1.7% |
1999 |
16.0% |
16.7% |
16.2% |
-0.7% |
-0.5% |
0% |
16.7% |
0.7% |
2000 |
9.2% |
9.2% |
9.8% |
0.0% |
0.6% |
0% |
9.2% |
0.0% |
2001 |
8.8% |
8.8% |
10.0% |
0.0% |
1.2% |
0% |
8.8% |
0.0% |
2002 |
5.0% |
7.7% |
8.0% |
-2.6% |
0.4% |
0% |
7.7% |
2.6% |
2003 |
7.2% |
7.0% |
7.4% |
0.2% |
0.4% |
0% |
7.0% |
-0.2% |
2004 |
6.7% |
6.5% |
7.8% |
0.2% |
1.3% |
0% |
6.5% |
-0.2% |
2005 |
6.2% |
5.5% |
6.6% |
0.7% |
1.1% |
0% |
5.5% |
-0.7% |
2006 |
6.0% |
4.9% |
7.0% |
1.2% |
2.1% |
0% |
4.9% |
-1.2% |
2007 |
5.7% |
4.5% |
6.3% |
1.2% |
1.8% |
0% |
4.5% |
-1.2% |
2008 |
6.2% |
5.7% |
6.4% |
0.5% |
0.7% |
0% |
5.7% |
-0.5% |
2009 |
7.7% |
7.7% |
7.7% |
0.0% |
0.0% |
0% |
7.7% |
0.0% |
2010 |
2.0% |
2.0% |
3.6% |
0.0% |
1.6% |
0% |
2.0% |
0.0% |
2011 |
3.2% |
3.2% |
4.0% |
0.0% |
0.8% |
0% |
3.2% |
0.0% |
2012 |
5.0% |
3.7% |
6.4% |
1.3% |
2.7% |
0% |
3.7% |
-1.3% |
2013 |
3.4% |
2.4% |
4.0% |
1.0% |
1.6% |
0% |
2.4% |
-1.0% |
2014 |
2.9% |
1.9% |
4.5% |
1.0% |
2.6% |
0% |
1.9% |
-1.0% |
2015 |
4.7% |
3.7% |
4.6% |
1.0% |
0.9% |
0% |
3.7% |
-1.0% |
2016 |
7.8% |
6.8% |
7.0% |
1.0% |
0.2% |
0% |
6.8% |
-1.0% |
2017 |
6.8% |
5.8% |
7.0% |
1.0% |
1.3% |
0% |
5.8% |
-1.0% |
2018 |
5.1% |
4.1% |
5.9% |
1.0% |
1.8% |
0% |
4.1% |
-1.0% |
2019 |
4.5% |
3.2% |
6.0% |
1.0% |
2.8% |
3.5% |
6.7% |
2.2% |
2020 |
5.1% |
3.8% |
6.0% |
1.3% |
2.2% |
4.0% |
7.8% |
2.7% |
2021 |
2.6% |
1.6% |
3.5% |
1.3% |
1.9% |
4.5% |
6.1% |
3.5% |
2022 |
7.3% |
5.6% |
10.1% |
1.0% |
4.5% |
4.7% |
10.3% |
3.0% |
2023 |
14.6% |
13.1% |
16.0% |
1.6% |
2.9% |
5.0% |
18.1% |
3.5% |
Source: Prepared by the author with information from Departamento Administrativo de la Función Pública [Administrative Department of the Public Function] (DAFP) (2018) and DANE (2023).
The gap between national allocations to public HEIs is also explained by the fiscal impact generated by regulations issued by the National Government. These relate to various aspects, but the most significant is related to the provisions on salary and benefits for public employees (SUE, 2021). Ultimately, the universities bear the fiscal cost, with no resources allocated by the Government to offset the higher expenditure. Hence, one of the most controversial points in the discussion about the underfunding of public universities is the application of Decree 1279 of 2002, which establishes the salary regime for university professors.
An additional aspect that explains the financial pressure faced by HEIs is the administrative responsibilities assigned to public universities to implement national public policies, such as those for programs like Ser Pilo Paga, Generación E, the Tuition-Free Policy (Matrícula Cero), Jóvenes en Acción, the Instituto Colombiano de Crédito Educativo y Estudios Técnicos en el Exterior [Colombian Institute of Educational Credit and Technical Studies Abroad] (ICETEX), among others. No additional resources are allocated for these types of expenditures.
In summary, the progressive underfunding of public universities is evident in the gap between the growth rate of enrollment and national per capita transfers. As seen in Figure 5, until 1999, the growth of enrollment and the amount per student for operating expenses practically moved in parallel. However, from that point onward, the difference between these two variables began to increase. In terms of investment, while growth has been accelerated, especially since 2013, its overall weight is still smaller. Therefore, it can be concluded that enrollment simply grew at a faster pace than transfers.
Figure 5
Per capita allocations vs. enrollment index in public universities (1993=100), 1993-2022
Source: Prepared by the author with information from the Ministerio de Educación (2023b) and DANE (2023).
Finally, another important fact that highlights the problem of underfunding in public universities is the gap between inflation, which has been the adjustment variable for transfers (revenues), and the Índice de Costos de la Educación Superior [Higher Education Cost Index] (ICES) calculated by DANE. As shown in Figure 6, in all years, the ICES exceeded the inflation rate of the previous year. For this reason, between 2014 and 2022, around 15 percentage points (pp) had to be financed; with 2022 being the year with the greatest divergence (3.97 pp). The problem arising from this phenomenon is that public universities have to cover the difference with their own resources. As a result, the additional points granted by the National Government to strengthen the budgetary base since 2019 were actually allocated to cover these shortfalls.
After conducting a global analysis of the allocations to public universities, this examination can be extended to evaluate the specific situation of each university. In general, what is found is that while enrollment grew at positive rates, the amount per student decreased in negative terms. Moreover, it is evident that there are several asymmetries between universities, both financially and in terms of coverage. On the other hand, unlike the behavior of per capita allocations, educational coverage increased at an average (simple) annual rate of 5.1%. Additionally, all universities increased the number of enrolled students.
Figure 6
Variation of the ICES in public universities vs. inflation, 2013-2022
Source: Prepared by the author with information from DANE (2023).
Demand Subsidies
As mentioned in the introduction, Law 30 of 1992 conceived a mixed model for the provision of services in higher education, which allows both the public and private sectors to jointly take on this task. As part of the mechanisms to encourage the increase in coverage, the state has been implementing various strategies, including demand-side subsidies.
The entity responsible for managing the resources allocated for demand-side subsidies is ICETEX. Over the past two decades, this entity’s action has strengthened as more students have turned to it due to the need to finance their studies. A relevant figure is that, between 2002 and 2017, ICETEX went from financing 9% of higher education students to a rate of 19%.
As shown in Figure 7, the number of loans disbursed by ICETEX grew rapidly between 2003 and 2016, although it later slowed down. A key fact is that the number of disbursements increased from 73.310 in 2003 to 280.940 in 2022. Similarly, the total portfolio increased significantly, from 1.4 trillion pesos in 2010 to 8.13 trillion pesos in 2022, meaning it multiplied by 5.8 and reached an average annual growth rate of 14%. In this context, disbursements increased from around 1.1 trillion pesos in 2015 to a total of 1.9 trillion pesos in 2022 (Table 3). When compared to the annual transfers made to Colombian public universities, the percentage averages around 38%.
Figure 7
Number of loans disbursed by ICETEX and total portfolio at the end of each year
Source: Prepared by the author with information from ICETEX (2023).
Table 3
Number of loans disbursed by ICETEX and disbursed amount (current pesos)
Year |
Amount disbursed per loan (new loans) |
Amount disbursed for maintenance subsidy (new loans) |
Amount disbursed per loan (renewals) |
Amount disbursed for maintenance subsidy (renewals) |
Total |
Disbursements/transfers to public universities |
2015 |
220.327.357.983 |
10.316.429.728 |
777.528.764.881 |
98.576.853.155 |
1.106.749.405.747 |
36% |
2016 |
280.122.372.544 |
11.359.759.766 |
947.703.200.421 |
89.823.757.408 |
1.329.009.090.139 |
40% |
2017 |
284.755.630.553 |
10.820.658.657 |
1.096.783.439.911 |
83.627.401.773 |
1.475.987.130.894 |
41% |
2018 |
236.514.933.576 |
7.621.914.374 |
1.170.615.420.446 |
76.801.887.686 |
1.491.554.156.082 |
40% |
2019 |
245.122.497.750 |
9.495.700.951 |
1.239.483.884.175 |
72.591.613.902 |
1.566.693.696.778 |
38% |
2020 |
253.473.885.724 |
14.008.794.331 |
1.231.546.153.498 |
79.541.318.559 |
1.578.570.152.112 |
35% |
2021 |
299.698.060.816 |
16.240.404.781 |
1.326.105.787.690 |
94.938.345.996 |
1.736.982.599.283 |
37% |
2022 |
373.641.741.286 |
17.354.119.199 |
1.447.897.956.625 |
107.736.087.261 |
1.946.629.904.371 |
37% |
Source: Prepared by the author with information from the Ministerio de Educación (2023a) and ICETEX (2023).
Complementarily, among the strategies carried out by the governments in recent years to promote access and retention in higher education, the program called "Ser Pilo Paga" stands out. This initiative, implemented in 2014, was a financial incentive created to cover tuition and living expenses for those who gained admission to undergraduate programs at accredited universities and also met certain socio-economic criteria and results in the Saber 11 exams (Table 4).
From a financial perspective, several criticisms have been raised about the "Ser Pilo Paga" program. Three main issues have been highlighted: low coverage, high cost, and concentration in private universities. Regarding the first aspect, access is undeniably low, considering the number of students who do not manage to enter higher education. As for the cost, in the four calls for applications, a budget exceeding three trillion pesos was allocated. Additionally, if other demand-side incentives managed through ICETEX are included, between 2016 and 2022, the total amount reached around 7.5 trillion pesos (Observatorio de la Universidad Colombiana, 2022).
Table 4
Number of beneficiaries per year for the "Ser Pilo Paga" program
Cohort |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
Ser Pilo Paga 1 |
9.374 |
9.193 |
9.018 |
8.847 |
|
|
|
|
Ser Pilo Paga 2 |
12.227 |
12.115 |
11.885 |
11.659 |
11.437 |
973 |
973 |
|
Ser Pilo Paga 3 |
|
8.759 |
8.593 |
8.429 |
8.269 |
8.112 |
|
|
Ser Pilo Paga 4 |
|
|
8.029 |
7.989 |
7.949 |
7.909 |
7.870 |
627 |
Total |
21.601 |
30.067 |
37.525 |
36.924 |
27.655 |
16.994 |
8.843 |
627 |
Source: Documents from the Consejo Nacional de Política Económica y Social [National Council of Economic and Social Policy] (CONPES) (2016) 3880 and CONPES (2018) 3914.
The most significant criticism of the "Ser Pilo Paga" program lies in the fact that the majority of the resources were absorbed by private universities. This situation is explained by two main reasons: the condition of universities being accredited and the tuition fees. According to the Observatorio de la Universidad Colombiana [Observatory of the Colombian University] (2022), students enrolled in private universities represented 85% of the total, while only 15% enrolled in public universities. As a result, most of the budget was directed toward private HEIs. Given the financial situation of public universities, these resources could have been used to strengthen public institutions, which did not happen.
In Table 5, the behavior of demand-side subsidies in higher education, executed by the Ministry of Education, is shown. As seen, when comparing these subsidies to the amounts allocated to public universities, the percentage grew from 40.8% in 2019 to 55.4% in 2023. This clearly illustrates how different governments have prioritized these initiatives, to the detriment of public university funding.
Beyond the Ser Pilo Paga and Generación E programs, it is worth mentioning the allocations derived from the application of Article 27 of Law 2155 of 2021, which created the policy of free higher education. These measures have been in effect since 2020, although the decision became official public policy in 2022. Additional laws, such as Laws 2307 and 2294 of 2023, have further deepened the application of this policy. While this provides socio-economic relief for students, public universities do not directly benefit, as the tuition fees are generally very low and represent a minimal percentage of the total revenue they receive.
Table 5
Demand-side incentives for access to higher education in Colombia, 2019-2023 (millions of current pesos and percentages)
Year |
Demand-side incentives (budget commitments) |
Transfers to public universities |
Demand-side incentives as a percentage of transfers to public universities (%) |
2019 |
1.701.948 |
4.173.759 |
40.8% |
2020 |
1.742.396 |
4.485.204 |
38.8% |
2021 |
2.321.291 |
4.716.884 |
49.2% |
2022 |
2.923.411 |
5.280.717 |
55.4% |
2023 |
3.055.441 |
5.514.662 |
55.4% |
Note: The data for 2023 corresponds to September.
Source: Prepared by the author based on budget execution reports from the Ministry of Finance (2023) for each year and data from the Ministerio de Educación (2023a).
Finally, another incentive that both undergraduate and graduate students receive is the voting discount, in compliance with the provisions of laws 403 of 2007, 815 of 2003, and 2019 of 2020. Once again, from a financial standpoint, public universities are not directly benefited by this measure. In fact, they often have to wait a long time to access the disbursement of funds, which leads to liquidity difficulties.
The purpose of this research was to analyze how, following the 1991 Constitution and the enactment of Law 30 of 1992, higher education in Colombia underwent a significant transformation in various dimensions, particularly in terms of the financing of public HEIs; a phenomenon that severely impacted public universities. Key findings include that, while it is positive that educational coverage has increased, the budgetary allocations made by the state have continually decreased. This situation inevitably affected the operational conditions of public HEIs, particularly universities. The growing precariousness of labor conditions was especially highlighted, which is evident in the predominance of part-time faculty hiring—a strategy that has also been adopted by private HEIs.
From a financial perspective, it was established that the state’s approach to providing educational services has become increasingly focused on demand-side subsidies and the benefits this provides to private providers, rather than strengthening public institutions. In the Latin American context, this diagnosis calls for a deep discussion about the consequences of student debt incurred by those attending private HEIs, a phenomenon that not only forces the most vulnerable social groups to finance their children's education with their own resources but also compels them to spend several years of their lives repaying their credit obligations (Rivera et al., 2021).
Additionally, it is concluded that, despite advances in management and performance indicators achieved by Colombian public HEIs over the past three decades, funding has been insufficient. Consequently, financial suffocation has been growing. Undoubtedly, this situation threatens the sustainability of these institutions, while also leading to a significant deterioration in the quality of service provided. This article argues for the thesis of the passive privatization of higher education. In this context, there is an urgent need for comprehensive reform in higher education, particularly in financial terms, to ensure that the core missions of HEIs are supported in the medium and long term, while also addressing the historical debt with these institutions. In fact, it is contradictory that, while the importance of education is emphasized, its financing is increasingly meager. Furthermore, the transfer system was designed three decades ago, under conditions that have radically changed in all their dimensions today.
Of course, there are several topics not covered in this research. For example, it is important to assess the specific needs of universities in areas such as physical and technological infrastructure, research, and staff engagement, among others. Furthermore, a deeper understanding of each HEI's financial situation must be understood. It is also necessary to analyze the performance results of HEIs in international rankings using performance indicators in order to identify existing gaps. On another note, it is crucial to investigate the consequences of reduced state funding on academic quality, as noted in some international studies (Brunner et al., 2024; López, 2016).
Ethical Considerations
This research did not require ethical approval as it was based on documents from government entities.
Source of Funding
This article was funded with the author's personal resources.
However, it is also important to note that this controversy simultaneously questions the efficiency of spending in public higher education institutions (Viaene & Zilcha, 2013), which goes beyond the scope of this research.
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