Student loans in developing countries : an evaluation of the Colombian performance

SWP182 This yaper is prepared for staff use and is not for quotation. The views are those of the author and not ncccssarily those of the Bank. INTERNATIONAL ELYK FOk RECONSTRUCTION AEiD DEVELOPMENT INTERNATIOKAL DEVELOPMENT ASSOCIATION Bank Staff Working Paper yo., 1 8 2 ! . < June, 1974 , STUDENT LOANS I N DEVELOPING COUNTRIES:: AN WALUATJONOF THE ! COLOMBIAN PERFORMANCE Student loans are often considered a s an innovative and promising policy tool in the field of education f-iaawq.. _If properly designed, loan schemes are a potential source o f caucation fin&crjl They may contribute t o altering the distribution.of educational opport-mities and the supply of educated manpower. FurtPiemofe, -t.key' -' have i ~ p o r t a n timplications forthe redistribution of the burden of educational costs. This paper is an assessnent of the Colombian experience with student loans. The methcdolbgical approach adopted here is an empirical me. The argume~;?.sdeveloped i n the paper are based on information drawn from a sample of about 4,000 loan a2plications covering the 1969-71 period. Preparation, of the s a m ~ l eand coding of the information were carried out under the supervision of Alberto Bayona, Consultant to IBRD, during the perlod JanuaryJune 1972. The data were processed by SOCOS ( ~ o c i e t ede Conseil Scientifiquc) i n Paris, France. The attached paper is the third i n a series of reports prepared i n connection with the research program being carried out . by the Education Departmeat (central ProJects s t a f f ) on education I finance i n Latin Americcr. Two other studies, namely, "The Financing 0 of Education: An Examination of Basic Issues" (Bank Staff Working Paper p No. 157, July 1973). and "Public Expenditures on Educationand Income $ Distribution i n Colombia" (World Bank Occasional Paper No. - JohnsHopkins Press, 19741, have already been published undJ8ihEe program. - i 1 am zrateful to Dr. Augusto Franco, Director of I ~ T E Xin ~olombia: for granting access t o ICETEX archives and for lending continuous support during the course of this study. Prepared by: Jean-Pierre Jallade Economist Education Department (cPS) Derived from Research Project No. RPO 244  -STUDENTLOANS IN DEVELOPING COUNTRIES: AN EVALUATION OF THE COLOMBIM PERFORMANCE Table of Contents Page No. I. INTRODUCTION 1 1. Generalities on the Colombian Student Loan Scheme 2 2. Evaluating a Student Loan Scheme: A Conceptual Framework 3 3. The ObJectives of the Loan Scheme Operated by ICETEX 3 4. Sources of Data 4 11. STUDENT LOANS IN COLOMBIA: A QUANTITATIVE OVERVIEW 7 1. Volume and Structure of Lending 2. The Beneficiaries of ICETEX Loans 3. Conclusions 111. ICGPEX LOANS AS A SOURCE OF HIGHER EDUCATXQN FINANCE 12 1. The Grant Component of ICETEX Loans 2. I m E X Loans the Financing of Universities 3. ICETEX Loans and Students' Finance TTr. ICETEX LOANS AND THE SUPPLY OF EDUCATED MANPOWER 16 V. THE GEOGRAPHICAL ALLOCATION OF ICETEX LOANS 19 1. The Distribution of Student Loans by Regions 19 2. Student Loans and the Geographical Mobility of the Recipients 20 VI. ICETEX LOANS AND EQUALITY OF EDUCATIONAL OPPORTUNITY 21 1. Student Loans and the Academic Ability of the Recipients L 22 2. Student Loans and the Socio-Economic Origin of the Recipients 23 3. Allocating Student Loans According to the Socio- Economic Origin and the Academic Ability of the Recipients 27 4. Sources of Student Finance by Sozio-Economic Origin 28 I . STUDENT LOANS AND THE INTERNALEFFI~ENCYOF THE EDUCATION 30 SYSTEM VIII. STUDENTS' ATTITUDES TOWARDS ICETEX LOANS 32 IX. STUDENT LOANS IN COIAMBIA: A SUMMARY 34 X. STUDENT LOANS: LESSONS FROM THE COLOIaIAN EXPERIENCE 38 Tables (NOS. 1-26)  STUDENT LOANS I N DEVELOPING COUNTRIES: AN EVALUATION OF THE COLObE3IA.N PERF'GRMIVCE I. INTRODUCTION I n the world of education finance, the principle of sharing the burden of educational costs between taxpayers and consumers of education is widespread. Great variations in the proportions of public versus private funds for education may be found across countries, over time i n a single country and among various types of education. Sometimes, policy makers are alsa seeking t o a l t e r % the existing mix of public and private finance f o r selected groups of students o r fields of study. Student aid policies are the uslial vehicle for such a change. These policies can be used t o increase (or decrease) the taxpayers contribution t o educational costs. By doing so, they contribute t o make certain types of educ3tion cheaper (or more expensive) for selected groups' bf<;hud;ents:' a:*& , alterattons i n the pricing policy of education arz usnaIly expected t o bring a number of beneficial effects such a f - ~ & - e d w ? & B ~ , opportunities f o r the poor, a supply of trained manpower better adapted t o the denand of the economy and a change? in the amount of resources available f o r education. Among the various student aid policies practiced a l l over the world, student loan schemes are often singled out as policies having strong potentialities t o achieve such objectives. The case f o r student loans is also made on the grounds t h a t the costs of education should be borne by those who benefit from it, that is t o say, the students rather than their parents. I f loans are available t o students t o finance their education, the traditional parental contribution is likely t o disappear and be replaced by students' contribution out of their future incomes. In other words, the immediate effect of a loan scheme w i l l be t, decrease the re- distribution of income that usually goes cn within families from older t o younger generations. This inter-generational redistribution of income has been an impordant feature of the student'loan schemes which have been operating in such developed countries as the United States and Scandinavian countries f o r quite a few years. But it is only recently - towards the end of the f i f t i e s-that such programs hav6 been launched i n developing countries, sometimes with the help of fnteniational donor agencies. The Dominican Republic, Panama and J p i c a are just a few examples among others. * It is fair to say that student loan schemes are presently raising great expectations i n the developing world although no assessment of the ability of such schemes t o f u l f i l l the sometimes ambitious obJectives assignee? t o them has ever been made. The purpose of t h i s paper is precisely t o make an evaluation of the performance of one particular student loan scheme operating i n a Geveloping country. Colombia, which has nearly twenty years of experience i n t h i s area, was selected for t h i s exercise.  1. Generalities on the Colombian Student Loan Scheme -1 / I n Colombia, the student loan scheme is run by ICGTEX; This institution functions as a decentralized public agency with legal and financial autonow. Lending money t o students is only one activity among others a t ICETEX which also operates various programs of fellowships ,aacademic orientation, counselling and contributes t o the general manpower planning effort of the country. Historically, ICETEX activities have always related t c higher education; however, in 1971, the management of the scl~olarship program for high school students was transferred from the Minist-af Education t o the Institute. I ICETEX funding originates i n public and scholar- ship funds, government subsidies, low-interest loans from the banking sector, and students' repayments. Between 1953 end 1969, the major part of the Institute activities was devoted t o the loan program f o r studies abroad. More than 20,000 sfudents here able-. t o finance t h e i r s t u ies outside Colombia, thanks t o ICETE!X 9 loans, during t h i s period. In most cases, these students- were.-br&uate.. *. students looking for post-graduate courses unavailable i n Colombia - a t that time. I n 1968, ICETEX uridertook a major s h i f t i n its lending policy by de loping a substantial lending program for B studies i n Colombia. Each year, about 10,000 students - that is, roughly 10 percent of the t o t a l Colombian student body - have been able t o finance t h e i r studies i n Colombian universities through t h i s program since 1969. This recent emphasis on loans f o r studies in Colombia has now become a permanent feature of ICETEX lending policies; i n 1971, 50 million Pesos were borrowed t o finance studies i n Colombia as against 30 million t o finance studies abroad. Furthermore, for the same year, the average loan for studies abroad was about 15 times as big as the average loan for studies in Colombia,which amounted t o ~~$280. A s a result, the number of loan recipients under the fonner program w a s 360 i n 1971 as against close t o 10,000 under the l a t t e r ptogram. The forthcoming analysis w i l l deal exc'lubively with the student loan program for studies i n Colombia. - ICETEX, Instituto Colombiano de Credito-Educativo y Estudios Tecnicos - en el. Exterior (~olombianInstitute of dducational Credit and Technical Studies Abroad). This institution was founded by Dr. Gabriel Betancur a Mejia i n 1950 and is presently directe Augusto Franco Arbelaez. The I n s t i t u t e acts as a clearing-house the fellowships granted by multilateral and b i l a t e r a l sources t o Colombian students. 2-/ 3 See El Credito Educativo en Colombia, 1950-1970, ICETEX, Bogota, 1970. This policy s h i f t was made possible thanks t o a drastic increase i n the borrowing capabilities of ICETEX. This vas achieved through a resolution of the Central Bank authorizing commercial banks t o make out-of-quotas, re-discountable loans t o ICGTEX a t a two percent interest rate.  2. Evaluating a Student Loan Scheme: A Conceptual Framework As it was shown elsewhere, student loans may have different - ar,d sometimes opposite - effects on the price and the demand f o r education and on the distribution of educational opportunities and income, depending on the objectives which they purport t o achieve and the pre-existi g financial arrangements affecting the costs of 9In higher education. the present study, no attempt w i l l be made t o compare student loans with other methods of education finance i n order t o determine i f and t o what extent student loans are the "best" way t o finance higher education i n Colbmbia. e approach adopted here will, rather, attempt ( i ) t o assess i f t ;I"e i n i t i a l objectives s e t forth by the founders of ICmEX have been met; ( i i ) t o check i f the loan scheme has had other unintended and, possibly, undesirable effects; and ( i i i ) t o make suggestions concerning alternative policies f o r the future. To put it i n another way, the study sd=!ises itseYf t o = the following question: "HOW effective have student loans 'beer, i n achieving t h e i r goals i n ~olombia?" An appropriete ansver fo t h i s question requires, f i r s t , an exhaustive analysis of what ICETEX has actually been doing during the recent years, and second, a comparison of its perfolnance with t h e i n i t i a l expectations. Such an approach w i l l permit t o throw some l i g h t on the strong a s well as the weak points of t h e Colombian loan scheme and w i l l provide reasons for success as well as failure. In this respect, t h e study is also an enquiry i n t o the circumstances under which the scheme could be made more effective and a s t e p towards the design of alternative policy courses for the future. 3. The Ubjectives of the Loan Schenie Operated by ICETEX The exercise which consistsi n defining the objectives of an institution i n such a way that they can be confronted with implementation is not an easy one, especially when the objectives are not defined in any precise and measurable panner. When the 'analysis is carried out a posteriori, there is always the r i s k t o enlarge what were i n i t i a l l y rather narrow objectives - thus making t h e i r attainment more d i f f i c u l t- o r vice versa, t o narrow ambitious objectives i n order t o make attainment easier. Either attitude depends largely on the analyst's prejudices vis-a-vis t h e institution under consideration. I n the case of ICETEX, t h e problem is even more complicated becaus'e of t h e policy change which occ?rrred i n 1968 and which ought t o be interp-ted as reflecting a change of objectives f o r the institution as a whole. In s p i t e of these difficulties, an attempt t o s p e l l out the goals of the student loan scheme run by ICE?I'EX is worthwhile simply because no policy-oriented evaluation of ICETEX performance i n t h i s area can take place without at l e a s t a minimum agreement on what student loans purpcrt t o achieve i n Colombia. See "The Financing of Education: An Examination of Basic Issues", by Jean-Pierre Jallade, Bank Staff Working Paper No. 157, IBRD, July 1973.  In this connection, the literature and the legal papers dealing with the founding of ICETEX emphasize three recurrent themes: ( i ) The f i r s t one has t o do with the belief that student loans could contribute t o provide the country with an adequate supply of highly skilled manpower. -It the beginning of ICETEX life, this was t o be achieved by sending students abroad for further training. As - higher education facilities developed in Colombia, student loans were made available 1 ' t o students who wanted t o pursue their studies in Colombian universities. ( i i ) Never ve?y far away from the manpower argument is the point made in favor of equality of educational opportunity. It was argued. ttlat. ' student loans w i l l increase the prospects of low-income students for gaining access to or pursuing university education. The social composition of the student body would thus be altered for the benefit of the poor thanks t o the loan scheme. ( i i i )The third argument in favor of student loans lies in their potentialities as a source of education finance. The idea of "financing higher education through a student loan system" has certainly played an important role in the setting up and Punding of ICETEX by Colombian authorities. It was also fostered by recurrent crises over the fllancing of higher education. Also, the belief that credit for education would permit t o pay for education by anticipating the students' productive . capacity is well in line with modern thinking t about education as a high pay-off investment. - The three above-mentioned objectives of the Colombian student i loan schemes are still stated in rather general terms. Further '9 - elaboration may indeed be necessary if a meaningful assessment of a their implementation is t o be made. This can be done by surveying e * ICGPEX's general lending policies. rn m The most straightforward way t o act upon the size and the structure of the supply of educated manpower is by making (certain types of) education cheaper (or more expensive) for individuals t o purchase. In connection with the supply of manpower, Colombian authorities always emphasized the context of scarcity of skilled manpower within which the country's econony was operating. A s a result, the Colombian loan scheme is pursuing a lending policy which  -1/ charges below the market interest rates. The resulting subsidy attached t o each loan should obviously r e s u l t i n a decrease i n the students' contribution t o t h e costs and, therefore, i n an increase i n the demand f o r education. Furthermore, ICETFX funds are expected t o be allocated among fields of study according t o the manpower needs required by the economic development of the country. The goal of equality of opportunity is sanctioned i n practice by two c r i t e r i a defining loan ~ * l i g i b i l i t y . By stating t h a t loans should be granted nly t o the students whose family income is below a certain ceiling-29and whose academic ability! is above the average student, ICETEX hopes t o encourage the enrollmeat i n institutions p i : higher education of a socially unbiased but academilcaliy capable I cross-section of the e l i g i b l e population. How can student loans contribute t o finance Colombian hieher education? I f one accepts the premise t h a t finsncing higher education means financing botin the institutions of higher education and the students who attend them, student -f~airai'e&dd the t r i c k t o the extent t h a t a portion of each loan goes to support - universities while the remaining part is made-gvaflable t o students t o help them face t h e i r maintenance (and related) expenditures. This is precisely what ICETEX loans a r e trying t o achieve by earmar icg a certain fraction of each loan for the financing of tuition costs- 37 while the remaining part goes t o the student themselves. Thus, the three overall objectives of the Colombian student loan scheme, namely, t o increase (or a l t e r t h e pattern of) the supply of highly skilled manpower, t o achieve more equality of educational opportunity and t o provide a meaningful source of finance f o r higher education have been clearly translated i n t o ICETEX's operational procedures. The purpose of t h i s paper is t o assess t o what extent these objectives have been implemented, altered during implementation or replaced, i ~ t e n t ~ i o n a l loyr not, by other objectives. r 4. Sources of Data . I Most of the data used i n the present study were raised through a sample of about 4,100 loan application forms f i l l e d out by borrowers between the y e u s 1 s 9 t o 1972. The sample does not . include rejected applications. $ese forms, which are part of the individual f i l e s kept i n ICETEX archives, include information about the type and location of the stucfies undertaken by student-borrowers, * 0 The interest r a t e chorged during t h e 1969-71 period is 3 percent. Repayment starts a f t e r a grace pericd varying from s i x months t o several years. 2/ ICETEX regulations s t a t e that no loans w i l l be granted t o students whose yearly family income was in excess of ~ ~ $ 1 0 , 0 0i0n 1971 f o r a family with two dependants. 1/ This fraction is forwarded directly by ICETEX t o the universities without going through students hands. '  their expected expenditures and sources of finance, their socio- economic characteristics and past academic achievement. Further- more, the system of f i l e s is organized i n such a way that it was possible t o follow-up a cohort of students who, after having borrowed money during a given year t o finance their studies, re- newed their borrowing in subsequent years. The lack of even superficial information about the universe as a whole led t o the adoption of a random sample of application forms representing about 15 percent of the universe. Th sample f was ~ t r a t i f i e donly by years and regions of spplicat,kond m e 1 processing of the information included i n t h i s samplk required the : preparation of a standa d coding sheet on which eacd individual's J data were transcribed. The punching of this information required two standard IBM cards per students .y In order t o pinpoint the impact of student loans, it would have been useful t o undertake systematic comparisons of the - ., information raised on students-borrowers with s i m i l a r .inf&rmationl about the student body as a whole. Unfortunately, the s t a t i s t i c a l --. data concerning the Colombian student population are-rather poor and often incomplete. Such comparisons are therefore difficult. However, the existing information found i n the literature and a t 1~F'E&/was used whenever possible. The National Testing servic&/of ICFES also provided un- published tabulations about students' attitudes towards the .financing of t h e i r studies, income levels and past academic echievement . ' The sturdy is divided into ten chapters. Chapter 2 provides a quantitative overview of student loans i n Colombia, Chapter 3 attempts t o evaluate the importance of student loans as a source of higher education finance. Chapter 4 focuses on the impact of student loans on the supply of educated manpower. Chapter 5 deals with the geographical allocation of ICETEX loans. Chapter 6 addresses i t s e l f t o the question of student loans and equality of educational opportunity. Chapter 7 attempts t o assess the influence of loans on - ICGPEX8 central office is located in the capital c i t y of Bogota; ' - four regional branches have been jet up i n Medellin, C a l i , ,9 .L Barranquilla e d Bacaramanga; a number of smaller offices exists a throughout the country, usually located i n the universities themselves. There is no toting space on ICYiEX loan application forms. coplea of both the loan application form and the coding sheet are shown in Annex I. 1/ The coding and punching operations were carried out a t ICETEX in Bogota during January-July 1972, under the supervision of Alberto Bayona Nunez, Consultant, IBRD-ICETEX. The actual processing was carried out by SOCOS ( ~ o c i e t ede Conseil ~ c i e n t i f i q u e )on Control Data 6600 during Jan-June873. 41 Institute Colombiano para e l Fomento de la Educacion Superior (~olombianInstitute for Development of Higher ducati ion). 5/ Servicio Racional de Pruebas.  on the internal efficiency of the education system. Some empirical evidence on students' attitudes towards loans is presented and discussed i n Chapter 8. Chapters 9 and 10 draw the main conclusions of the study and outline a few alternative policies for the future. 11. STUDENT LOANS I N COLOMBIA: A QUANTITATIVE OVERVIEW 1. Volume and Structure of Lending The t o t a l number of loans granted t o students by ICETEX over the three-year period 1969-71 is estimated at 30,000.~/ It has increased by roughly 10 percent a year, s t a r t i n g with sligthly more than 9,000 loans i n 1969 - which was t h e t f f r s t year of l a r g e .1 scale lending for studies i n Colombia - and culminating with . I approximately 11,000 loans i n 1971, which represents about U1. ' percent of the Colonbian student body. Table 1 shows that the average amount of loans - which are granted on a yearly basis - has been around 5,500 Pesos ( ~ ~ $ 2 5 0 / 300) and has increased by 10 percent over the++&@., .About 83 percent of the loans were granted t o male students es'~ag&~t:=t . . I percent t o female students who account for about one-fourth o f the stuaent body as a whole. Because, as an average, 2- fgr,- men are about 10 percent higher than loans for women, close t o 85 percent of ICETEX funds have gone t o men as against 15 percent t o mmen over the period. ICETEX loans are tailored t o finance four types of expenditures: maintenance, tuition, books and expenditures related t o the termination of studies (graduation). In practice, such earmarking of funds i s extreme13 important t o determine the role of loans i n the financing of higher education: the funds earmarked for the financing of tuition costs contribute t o finance universities while those going f o r maintenance costs, books and graduation a r e designed t o help the students themselves. Table 1shows that, over the 1969-71 period, about 35 percent of ICETEX funds went for tuition costs, 52 percent for students' maintenance expenditures, 10 percent and 3 percent for expenditures on books and graduation respectively. While no significant changes i n these b proportions were recorded during the period, females were clearly using much high r proportion of their loans t o finance tuition costs than me 3and a much lower roportion t o finance their maintenace expenditures than men. 9 In the Colombian context, one can explain these differences by the a b i l i t y of female students t o generate more family help which substitutes for ICETES funds i n paying for maintenance expendituress4/thus enabling them t o use these funds t o finance more expensive studies. ? 1/ It is recalled that this study is restricted t o ICETEX loans whose purpose is t o finance post-secondary education i n Colombia. 50-55 percent as against 30-33 percent. 35-40 percent ss against 50-55 percent. Female students l i v e at home probably more than male students.  According t o Table 2, the typical student-bor-over is single. Married students account for 11percent cf a l l loan recipienJ s only. However, because the average loan t o married students is 40 percent higher than t o single-students, the former receive 15 percent of ICETEX funds as against 85 percent for the l a t t e r . Logically enough, married students devote more money t o finance their maintenance expenditures than do single students: close t o two-thirds of the Iaans as against one half. A s a consequence, married students spend relatively less on tuition, although still more in absolute values because they get bigger loans than single students. A breakdown of loan recipients by shows that younger students, i.e., under 24 years of age, received slightly more than half of all ICETEX loans between 1969 and 1971 and that t h i s proportion decreased irom 58 percent i n 1969 t o 51 percent i n 1971: see Table 3. The average size of loans incre2ses systematically with age: loans t o students ovor 26 are 38 percent bigger than loans t o students under 21 over the 1969-71 period. A s a corollary, the share of students under 24 years of age i n ICETEX funds amount t o 49 percent during the period and dropped from 53 percent t o 46 per- cent between 1969 and 1971. A s no data' on the age structure of the-. ' student body a t large exist i n Colombia, there is no way of checking i f ICETEX favors or discriminates against any age-group, _ w e proportion of loan funds devoted t o maintenance and graduation expenditures increases with age while the corresponding proportion spent on tuition decreases accordingly. Middle aged groups between 22 and 25 -spend always more on books than younger or older age groups: 12 percent as against 9 percent. In 1969, f i r s t year during which the program was operating on a f u l l scale basis, ICGTEX loans were allocated more c? less equally among the f i r s t five years of study. Post-graduate and six- year students received less than 5 percent of all the loans granted during that year: see Table 4. In 1970, while each year of study received a bigger proportion of loans than i n 1969, the share of f i r s t year students drop~cdfrom 21 percent t o 8 percent. The same phenomenon occurred again i n 1971 and was accompanied by a decrease i n the proportion of ~ e c o n dyear gtudents i n a l l loans. The only explanation seems t o be that, while freshmen were given the same opportunities t o rece!ve ICETEX loans as other students a t the beginning of t.he p r o p m i n 1969, nost of them borrowed again i n subsequent years t q finance their second and third ye%- of study, thus creating a shg-:tage of funds which discriminated against s r - first-year studentg. The most &cent iata on the distribution of the student body by year of study r&er t o the year 1966 during which 4 percent of a l l students were enrolled i n the f i r s t year of study.!' I f t h i s proportion rew-ined the same through 1969, then first-year students are clearly discriminated against by ICEZEX operations as they received only 10 percent of all loans during t:~e1969-71 period. Second year Students who account for 23 percent of the student body i n 1966 were 1/ See "La Education en Colombiat1, Boletin Mensual de Estadistica, June 1969.  also discriminated against, but less so, as they receiv d 17 percent of all loans. On the contrary, more advanced s t u d e n t s ~ ~ ( 3percent 7 of the student body) received a preferential treatment from ICETEX as they were granted 73 percent of a l l loans over the period. This finding is reenforced by the fact that the average amount of loans increases steadily with year of study.21 Loans for postgradmte studies, for instance, are 3.4 tines bigger than loans t o f i r s t year students over the 1969-71 period.y As a result, more than three-fourth of ICWEX funds (77 percent) have gone for the support of advanced studentsklas against 23 percent for the support of f i r s t and second year students who account 1-or more than half of.! the student body. b , .; The structure of loans t o students. by ycar of study is shown i n Table 4. While, on the whole, the share of expenditures on maintenance and books increases with year of study, Ere share of tuition expenditures dccreases accordingly. Two extreme ~ ~ s i t i o n s are expressed by f i r s t year studenx and pos8g&a~t~-st5'u_e~~ts:the former devote 34 percent and 60 percent of t h e i r loans t o &ai'nt&ed and tuition expenditures respectively a s against 81 percent and 15 percent f o r the l a t t e r . The importance of graduation e x p e n d i t a ~ a . 2 s f a r from beicg negligible - about 10 percent of the loan - among students enrolled i n the f i f t h and sixth year of study. Close t o three-fourths of all lo& recipients during the 1969-71 period were part time students and t h i s p r ~ p o r t i o nincreased from 1969-1972 (see T= Presumably, these students also worked part t i m e , which seems t o indicate that wages were used as an additional source of finance t o complement loans. This being said, part time students were inclined t o apply f o r smaller loans than the minority of fbll t i m e students. However, the difference is small; loans t o f u l l time students are only 10-15 percent bigger than loans t o part time students. Furthermore, f u l l time s udents do not borrow more t o pay f o r their maintenance expenditureszjbut t o purchase more expensive education: 60 percent of the amoullt borrowed is spent on tuition as against 32 percent for part time students. . e A l l t h i s seems t o suggest thet part time studies i n Colombia reflect more a fact of l i f e t h ' k a prefermce for wages over loans. The majority of student-borrowers nced t o combine part t i m e work and loans in order t o make it. Only a minority of loan recspients can do without part time work but probably not without somefother form of assistance. - - 8 r/ m Ttiird year students o r more. -21 This finding is consistent with the previous one showing that the size - of loans increases with age. 1/ Post graduate students thus receive 8.5 percent or" ICETEX funds with only 3.2 percent of loans. 4/ Third-year students o r more 5/ They probably get financial help from somewhere else (their family, perhaps) t o par f o r these expenditures.  2. The Beneficiaries of ICETEX Loans ICETEX loans a r e made on a one-year basis t o finance studies which usually last about five years, sometimes more. A s a consequence, students are inclined t o renew t h e i r borrowing year a f t e r year u n t i l completion of t h e i r studies. The result is that, while the number of loan recipients is always eqbal t o the number of loans awarded on a one-year basis, there are always fewer beneficiaries than loans on a longer period simply because each borrower may be granted various losns by reilewing h i s applicatior. over several years. There seems t o be no limitations t o the practice of renewed torrowing and the possibility has been largely used by Colombian students a s shown i n Table 6. I n 1969 -the f i r s t year during which the program was operated on rz large scale basis - the proportion of f i r s c time applicantsrwas at its peak (63 percent) but thers were already 23 percent of secand time applicants. In 1970, the majority of applicants (54 pcrcent) upre applying for t h e i r second loan and only 16 percent of all a p ~ l i c a n t s were f i r s t time applicants. In 1971, third-time applicant3 were, by far, the most numerous group (47 percent) an& the pr-argion of first time applicants dropped even further (12 percent),^ This-p-&term holds f o r men and women alike. Thus, the students who benefited most from the ICETEX lending program for studies i n Colombia are those who f i l l e d t h e i r first application at the beginning of the program in 1969 and rene-ifed it i n subsequent years. A s a consequence, there were few loans l e f t available f o r those who, lesa a l e r t o r not eligible f o r loans f o r whatever reasons i n 1969, started t o borrow l a t e r i n 1970 o r 1971.u Tabla 7 sk.ows the extent t o which studeilts actually managed t o renew t h e i r borrowing year a f t e r year. Considering a cohort of 1,000 students who borrowed for the first time i n 1969, two-thirds of them received t h e i r second loan i n 1970, 40 percent received t h e i r t h i r d loan i n 1971 and 15 percent managed t o borrow f o r the focrth time i n 1972. A s an average, each studen'; of the cohort was awarded 2.2 loans o-rer the 1969-72 period, that is about ~~$600-650 from ICETEX funds. Fourth-time borrowers i n 1972 yeceived, on an average, about ~S$1,100 - 1,200 of ICETEX funds over the 1969-72 period. As a result, the liumber of students a c t u d i y helped by ICLTEXwas less_ than half t h e number of loans awarded over the ~ e r i o d . 3. Conclusions To sum up, one c x sketcg out a preliminary profile of t h e "typical" loan recipient-who is a b l e , single and somewhere betwee.? 20 and 30 years of age. H e is alieady well advanced i n h i s studies, which a r e a part-time occl~pation.0ncehe applies for and is awardeci a loan from ICETEX, he has a strong tendency t o renew h i s b0rrowin.q 1/ Although f i r s t t i ~ borrowers are not necessarily f i r s t year students, e t h i s finding confirms what has been said previously about the diminishing a b i l i t y of freshmen t o get loans a f t e r 1969.  over the years. The ~S$250-300or so which he gets each time i s vekd for payment of his tuition fees (35 percent), h i s own living expenditures (52 percent) and other expenditures related t o h i s studies, namely, books (10 percent) and graduation ( 3 percent) . Ttiis structure of expenditures represents an average. Loan recipfents tend t o spend more on maintenance expenditures and less on tuition when they are male, married, o!der, more advanced i n their studies and part time students. A l l i n ill, they are rather privileged persons since only one student out of ten benefits from ICGTEX funds. These f i r s t findings raise a number of: questions concerning ICETEX lending policies: , t ( i ) The case of female recipients who are relatively few and get smaller loans than men, is an un- settled one. As the prop~rcionof females i n tkColombian student body increases, ICE'ITX!$ - , doctrine with respect t o female students strould be clarified. Sfiould ICETSX contribute t o the inevitable trend toward t h e relative feminization of the student body by lending relatively more t o female than t o male students or Just accompany t h i s trend by making sure that the proportion of women i n the borrower population is a t least equal t o that of the student body as a whole? ( i i ) In view of the always limited amount of funds available for lending, the case for women would probably have t o be weighed against the case for lending t o married, older, full-time o r more advanced students who a l l get ?hove average loans. ( i i i ) As the ICETEX lending program is i n f u l l operation, it appears that first and second yyar students, as well as f irst-time borrowers, ' d o not receive their f a i r share of ICETEX funds which seem t o be somewhat committed t o helping advanced students through graduation. A s loans a?? made on a one-year basis, the choice . is between helping again those who have already been helped and bringing new beneficiaries into - the system. Ferhaps ICETEX shou.ld take a harder look a t alternative sources of finance - such 8 as wages - which are more retciily svailable t o some students (older ones?) than t o otsers . Perhap also, eligibility for a second loan could be submitted t o harsher c r i t e r i a than for a first loan. This is no easy policy choice but it is an inescapable one as long es funds available f o r lending do not grow a t a pace a t least equal t o that of the eligible population.  IC5TEX LOANS AS A SOURCE OF HIGHER EDUCATION FINANCE A s mentioned earlier, part of ICETEX loans is devoted t o finance tuition costs and can be considered as a source of university revenue. The remaining part is used by students t o finar:e t h e i r living and instructional expenditures. Befcre spelling out the importance and role of ICETEX loans i n the financing ( i ) of the Colombian universities and ( i i ) of the students who attend them, it is worth rec:.lling that ICETEX loans are highly subsidize1 through below-the-zarket interest rates. Q . 1. The Grant Component of ICETEX Ldans. During the 1969-71 period, ICETEX charged an interest rate of 3 percent on a l l loans for studies i n Colonuia. Further- more, repayments were due after a grace period of variable duraticn, from s i x months, which is the time allocated t o graduates t o find a job, t o several years for borrowers who have not completed their studies. It is fairly obvious that an interest rate of 3 F~EL- makes ICETEX loans very cheap. In order t o determine the exact amount of sub- sidy involved by each loan, one must have an idea of the commercial rates charged elsewhere for loans of similar duration and characteristics. This is not an easy task i n a country like Colombia because past domestic finance policies have resulted i n a wide array of interest rates which are designed t o help some economic activities a t the expense of others. Even within one particular sector of the economy such as agriculture, interest rates of 8 percent for, say, farm extension, coexist with interest rates of 13 p e r c e ~ tf o r , say, farm purchase. A fortiori, i n a sector l i k e higher education where no comparable precedent exists as .let, the fixing of an interest rate for loans t o students is h u n d t o be largely arbitrary. In t h i s connection, it is worth recalling, however, that the consumer price index rose by roughly 10 percent a year in *Colombia during the 1969-71 period. O f ccurse', hobody really knows vhether inflation will &bate or worsen and it is f a i r t o say that the country has done better in this respect i n the past. S t i l l , a 10 percent interest rate-on student loans provides, i n the present s t a t e of affairs, a rgugh guideline i f loans were - ' only t o be repaid i n r e a l terms. &Needless t o say many financial institutions charge much higher interest rates 15 percent or more - f o r non-regulated a c t i v i t i g. * m Rough calculations show that the typicai ICETSX loan oO bout ~S$300carrying a t 3 percent interest charge w e r five years ikplies a grant component which is half the principal when compared with a similar loan carrying a 10 percent interest rate and about equal t o the principal when compared with a similar loan carrying a 16 percent interest rate. such a policy of heavily subsidized loans implies, in the absence of any modification i n the pricing of education (tuition fees) t o students, a s h i f t of the financial burden of higher education away from the students t o the non-  r/ students as the subsidies have t o come from someone. It also contributes t o an overall increase i n the demand for higher education through a decrease in its price. In 1972, ICETEX took some steps aiming a t both reducing the grant component of loans and quickening the pace of re- payments. This was achieved by proposing t o borrowers eight alternative repayment plans carrying interest rates which in- crease strongly as the duration of the plan increases. Under t h i s new procedure, only the shortest plan which requires debt repayment i n one single year, carries the old interest rate of 3 percent and, therefore, a full-size subsfdy. The longest plan requires the repayment of the debt i n eight years and carries i.I' a 16 percent interest r a t e which is very close t o market rates..; ,.. Such loans involve hardly any subsidy at all. Although there is no data available yet as t o which plans - d i l lbe selected by the student-borrowers, the increased interest rates should, however, result i n a decrftaae~iW-+2h &'- ' demand f o r education and in the power of loans as inoenkirerta undertake university education. By shifting the d e h t h a d e a - - . away from ICETEX and its sponsors t o t h e s t m . t b ; they should also contribrte t o the self-financing of ICETEX. 2. I C E I Z X Loans and the Financina of Universities 13 Colombian higher education, private universities have traditionally coexisted with public universities. I n 1970, their respective shares of enrollments were rough.'Ly fifty-fifty but t h i s has not always been the case: t h i r t y years ago, private universities used t o enroll only one-third of the student body. From the financing viewpoint, the main difference between the two is that private universities charge much higher tuition fees than public universities. As a consequence, tuition fees are a much more important source of total university revenue in the private sector than i n the public s e c i - ~ r . A breakdam of the volume and Structure of loans t o students by type of university is given in Table 8. During the 1969-71 period, students enrolled i n private universities received slightly more -- than one third of the loans (36 percent) but 44 pe.?cent of ICETEX - funds because the average amount of loans was 38 percent higher than - f o r students enrolled i n public universities. 9 The structure of loans by type of university-varies widely: 72.4 percent of the average emount of loans t o s 9 d e n t s i n private universities is earmarked ** f o r tuition expenditures as againsr; 7.5 percent i n public universities. , Inversely, students i n public universities devote 74.3 percent of each loan t o the f i n a c i n g of their living expenditures as a g a i n ~ t 13.7 percent for students i n private universities. Lastly, students in public universities spend close t o 15 percent of each loan on books as against 6 percent f o r students i n private universities. 1/ ICZTW w i l l make up for the difference between interest rates in the f i r s t instance. But, i n the long run, the burden w i l l fall on the financial sponsors, both public and private of t h i s institution.  A s a result, ICETEX loans contribute much more t o the financing of private universities than t o the financing of public ones, both because loans are bigger and the proportion of each loan devoted t o tuition is much hig?t,r in the former case than in the latter. For each loan granted t o a student in a private university, 4,660 Pesos go t o the university as tuition fees as against 350 Pesos in the case of a public university, that is, 13.3 times as much. Over the 1969-71 period, about 51 million Pesos of tuition fees financed on ICIWEX funds went t o private universities as against 6.7 million t o public universities, that is 7.6 tines as much.U Needless to say the higher tuition fees charged by private universities go a long way t o explain why loans are b;igger in the case of private universities than of public universities. Students willing t o enroll in the former institutions have t o face high tuition costs,which are reflected in their loan applications. On the cgntrary, the very low, not t o say nominal, tuition fees charged by public universities leave applicants in a sft&hn- '- >. -- where living costs are the single most important justificatiaa for loans. Although data about the various sources of finance of public and private universities leave much t o be desired i n Colombia, an attempt was made t o assess the importance of tuition fees financed for ICETEX funds in total unive-sity revenue for 1969 and 1970 (see Table 9). The f i r a t striking thing is the huge difference in total university revenue between the two sectors,uhich enroll a rcVa.iyidentical number of students. Unless the t o t a l revenue of private universities is grossly underestimated, which is alwe~18 possible, and provided all revenue is spent, a student in the public sector would cost three times as much as in the private sector. Close t o 70 percent of total revence of private universities originate in tuition fees as against 5 percent for public universities. When ICETEX loans are brought into the picture, one can see that around 9-10 percent of all tuition fees are financed by ICFPEX funds . in the private sector, as against 4-5 percent in the public sector. 'Finally, tuition fees financed through loans amount t o 6-7 percent of total revenue in private universities as against 0.2' percent in public universities. The inescapable conclusion is that ICETEX loans are a small sourcz of finance for ~ r i v a t euniversities and a nenli~ibleone for public universities. This difference of treatment results from the various features which characterize university finance i n the public sector as compared with the private sector, namely, (i)>i&er total revenue per student, ( i i ) lower proportion of total revenue originating in tuition fees, ( i i i ) lowor amount ( i n absolute values) of tuition fees financed by loans , (iv) lower proportion of loan financed tuition fee8 t o total tuition fees. - -. - 1;/ These data are computed on the basis of 30,000 'ICETEX loans for studies in Colomhia over the 1963-71 period.  3. ICETEX Loans and Students' Finance In each ICETEX loan, the amount which is not earmarked for tuition is used t o finance students' living expenditures as well as their expenditures on books and graduation. A s Table 10 shows, students enrolled i n public universities always enjoy greater support from ICEJ?EX for these expenditures than students enrolled i n private universities. A s an average, the former received 2.8 t!.nes as much as the l a t t e r over the 1969-71 period. The explanation is, of course, that the former group opencba much smaller part of t h e i r loans on tuition than the l a t t e r as was shown i n the preceding section. 6 t ,:< ICGTEX loans are not the only source of student finrmce. 62 b o n g other things, students may enjoy family help and receive wages. When applying f o r ICETEX loans, students are requested t o declare all the financial help which they may be able t o secure in addition t o loans. As Table 10 shows, the t o t a l amount of student finance available t o each borrower is very slightly and perhaps not significantly higher i n the public sector than in-the-$MVk%e~sect"or. More striking is the fact that, over the 1969-71 period, 'ICfieX "loans accoun.ted for more than 60 percent of t o t a l student finance for 0-r i n public universities as against 27 percent f c r students i n private universities. I n the public sector, family help and other sources of finance (including wages) account for about 20 percent of t o t a l student finance as against one-third and 40 percent respectively i n the private sector. To put it i n another way, because public sector students rely much more on ICETEX loans f o r their living than do private sector students, the l a t t e r group would probably manaie t o find substitutes much more easily than the former gr3u i f no loans for living and related expenses were available. 9 To what extent are these amounts of student financz i n l i n e with expected student expenditures is hard t o assess i n the absence of any data on student individual budgets. F'urthermore, it is probable that relatively wide margins of error are likely . t o affect students' expectations vis-a-vis tbe costs and financing of their studies. One should expect, however, the structure of student finance t o vary _according t o socio-economic backgrounds, a s family help, for instance is more readily available t o wealthy - students than t o the ot&rs.d As a conclusion'the role of ICETEX loans i n the financing of Colombian higher edubtion can be summed up i n the following way: First, ICETEX loans are heavily subsidized through low interest rates. Although they might be considered as a cheaper system than a system of outright grants, they still, i n the absence of such a system, result i n a greater involvement of non-student funds i n the provision This statement does not contradict the conclusion reached i n the preceding section, namely, that students enrolled i n private universities devote a major part of t h e i r loans t o the financing of tuition expenditures. See Chapter VI.  iof higher education and in an overall increase of the demand for education. This situation &ght be reversed soon as the interest Pates charged on ICETEX loans wereto be increased from 1972 and on. Becond, it is hardly exaggerated t o say that ICETEX loans play a negligible role in the financing of public universities but an important one in the financing of the students enrolled i n these universities. Conversely, they are a small source of finance for private universities through tuition fees paid by students, and private sector students use them t o complement the other sources of finance available t o them. ICETEX LOANS AND THE SUPPLY OF EDUCATED MANPOWERf One of the explicitly stated objectives of the.student loan scheme run by ICETEX is t o contribute to shape the supply of educated Wpower i n accordance with the economic needs of the country. It vas shown i n the preceding chapter that the effect of ICETEX beavily subsidized loans is t o make higher education cheaper for students to purchase, thus leading t o an increase in the overu2.2 .- demand for education and a subsequent increase in the supply 4f a educated manpower. ICGPEX lending policies also seek t o alter the structure of the supply of e4ucated manpower by granting a preferential treatment t o some fields of study a t the expense of others. They can do so by enforcing selective lending policies and by varying the size of loans - that is,their pover as an incentive t o undertake a given type of university education - according t o the fields of study under consideration. The volume of ICETEX lending by field of study over the 3969-71 period is shovn i n Table 11. The four main beneficiaries, Which have received 71 percent of a l l loans and 74.2 percent of all M d s are Engineering, Medical Sciences, Agriculture and Business bdministration in that order, with engineering alone accounting for bearly one-third of the total. There is no need t o elaborate man- p e r forecasts t o state that a l l these fields of study probabiy . t Pall among the prioritletif of the country,although the low preference granted t o studies in middle-level technology is conspicuous. The mphasio on engineering and business administration is particularly Btrong i n private universities where over helf of a l l loan? are toncentrated on these two fields of study. On the c o n t r q , student- borrowers i n public universities tend t o concentratp on medlcal sciences (21 percent) and agriculture (19 percent) .d = . There is no clear relationship between the aver- size of loans granted by ICETEX and preference for academic s p e c i a l t ~ . b a n s for studies in engineering and medical sciences are slightly bigger than the average but the reverse is true for loans in Agriculture and business administration. The smallest loans are foted anted for studies in humanities and middle-level technology. As before, loans for studies i n private universities are always &/ In this connection, it is worth observing the negligible amount of ICETEX funds going t o agriculture i n private universities.  bikger than i n public universities except for agriculture and cation. When the distribution of loans by field of study is with the distribution of the student body ks a whole,l/ incentives t o increafs the propensity as engineering, medical sciences, and exact sciences. The impact of ICETEX is probably i n the case of agricultural studies i n which 12.4 loan recipients but only 6.6 percent of the student fields, borrowers are under- body as a whole with the possible There seems t o be a strong bias i n which only 2.1 percent of a l l loan! the student body are enrolled? ,' 1 The foregoing considerations rest on two opposite - and ( i ) all student-borrouers -duo field of study of the loans, or ( i i ) vice-versa, noae have gone t o the un.yersity i f the way of saying t h i s i g t o say; , as an "addition" t o i I These assumption.3 are clearly too extreme t o be tenable Is an the truth must be somewhere i n the middle. I n assessing the re ponsiveness of students t o ICETEX loans, one should consider a t l e t two factors, namely, the importance of loans vis-a-vis other ce and the size and structure of loans vis-a-vis the s of studies. Obviously, the more important are loans within all s of financing and the closer they get t o the actual s of studies, tkn zreater w i l l be the responsiveness of students, The available evJdence i n this respect is shown i n Table 12. 62.4 percent and 56.5 percent of a l l finance t o public and private sector students respectively. In other are a very substantial and probably the mador source of all students, but even more so for the former grou9 than It is actually hard t o imagine how the loan have enrolled without loans, unless, of course, the other than ICETEX are voluntarily under-reported I I n the public sector, the loans are-most important for id. science students (72 percent) and leas important for students (44 percent). I n the private s ICETEX loans a l l financing available t o students i n for only 42 percent for studerrts i n humanities two extremes, however, there is no the degree of priority granted available f o r the year 1968 only. proportions i n the case of students i n agriculture and middle-level technology; but the number of loans is s o small. i n these two fields that no generalization is possible.  by ICETEX t o each f i e l d of study and the relative importance of l o a i ~within a l l available finance. ~ In other words, there is no firm evidence t o conclude that stcdentu i n priority areas have enrolled thanks t o ICETEi loans t o any greater extent than students i n other areas. When the average - o u t of loans by field of study is cornpired with the corresponding cost of studies, one can see thc.t ICETEX loans w i l l pay for 70 percent and 77 percent of tot6.l costs of studies i n the public and private sector yespectively.ll But there is l i t t l e deviation from these aversges across fields of study. There seems t o be no attempt'. on the part of ICETEX t o foot a larger part of the b i l l for. sme specialties than for others i n such a way !that loans would be a stronger determinant of university entrance i n the f i r s t . case than i n the second. Such a policy would allow IC- t o s h i f t some funds away from nonpriority areas t o priority areas and introduce more room for maneuvering i n its lending policy. For instance, loans could be granted a major incentive power by being the single most important source of finance %&.the pri~xi*, cases, but would only be considered as "complementary Cineacing" . i n the non-priority cases. ICEIZX loans finance tuition costs nearly i n full i n the private sector but only 75 percent of them i n the public sector. This may not be that important since t h e tuition fees charged by public universities are very small. About 70 percent of student expenditures on maintenance, books and graduation are paid for by ICETEX loans i n the public sector as against only 51 percent i n the private sector. Deviations from t h i s pattern across fields of study are insignificant i n the f i r s t case but quite substantial i n t h e second one. The proportion of maintenance (and related) costs financed by a loan is 22.6 per- cent for medictil students as against 62.4 percent for students i n economics. Needless t o say ICI-XEXloans are a stronger incentive i n the second case than i n the former, all the more so that tuition costs aresin both cases, financed nearly i n f u l l by t h e loans. , , To sum up, ICETEX loans appear t o have a major influence on the supply of highly educated manpower i n Colombia as they are concentrated on a few fields of study. They seem t o be an equally stmng incentive i n all fields of study as they are, most often, th? siiigle most important source of finance and cover a maor part of t h e costs of studies. These conclusions should be considered with calltion as they are based on costs and finance data dram from 10- application fonns. A s applicants expect t h i s information t o be used t o grant or deny a loan, it may not accurately represent -1/ The fact that, i n the public sector, ICFPBX loans are a more important source of finance and, at the same t i m e , account for a lesser proportion of t o t a l costs than i n the private sector, c m be explained by greater "over-financing" ( t o t a l finance superior t o t o t a l costs) i n the l a t t e r than i n the former.  i e r e a l world. The gossibility of a systematic upward (cost) downward (finance) bias cannot be ignored. In t h i s respect, I ETEX could greatly enhance the accuracy of its operations by rking out its own, independent, student buc?get data and s rveying more closely the amount and structure of financial hblp other than loans, usually available t o thc average student. It also appears thqt, while ICETEX lending policies are 1 v ry selective i n the sense that more l c a s are granted t o finance s udies i n priority areas than in other areas, l i t t l e has been tione t grade the inccntive power of loans - i.e. their importance v s-a-vis other - SOL-C~S of finance and tota1:costs of studies ih accordance with the degree of priority granted t o each f i e l d , ,\ o t study. V \ THE GEOGRAPHICAL ALLOCATION OF ICETEX LOANS ICETEX headquarters are and have always been located i n During the recent years,; lac&,, Cali, Barranquilra an3 In addition, a number of small-;LocaL,H,fj.~es are closely in l i n e uith that of the student body as t o some policy statements issued by ICETEX, Bogota should be considered as an attempt opporxunities t o those groups of students because of their place of residence. 1 1. The Distribution of Student Loans by Regions I The distribution of ICETEX loans across the fifteen gions having institutions of post-secondary shown i n Table 13. The data, which refer t o the period, illustrate two different pictures in public a t e universities. In the public sector, the distribution qs and of the t o t a l amount borrowed i s very closd t o e student population. For instance, the share of ca, which includes the capital c i t y of Bogota, remains nstant with 31-33 percent of the t ~ t a iln the three . ,Antioquia - ns The second largest terms of enrolhr?nts, with the city of Medelli - - and Valle del ( ~ a l i )appear t o be slightly discriminaed against by 8 operations: they account for 23 perce of the student W but receive only 20.9 percent of e loans and 21.4 the money borrowed. No clear patternemerges i n the ns, some of which get a higher share in ICETEX funds ed to by their student population while ~ t h e r sdo the The situation is totally different in the private sector. that the student population is heavily the capital city of Bogota uhich accounts for the t o t a l and i n the second ( ~ e d e l l i n )and third c i t i e s with 14.3 percent and 4.9 percent of the Ten regions out of f i f t ~ e nhaving  institutions of higher education have no private universities. Second, ICETEX operations contribute t o reenforce the weight of the capital city of Bogota as 88.3 percent of a l l borrwers study there. In a l l other departments, the proportion of borrowers is lower than t h e i r shares i n the student population. Third, as a result of the size of loans granted t o Cundinamarca students (they are bigger than elsewhere), the share of Cundinamarca ( ~ o g o t a )i n a l l borrowed funds climbs t o 91.8 per- cent~whilea l l other departments' shares decline accordingly. I n addition t o Bogota, only Antioquia (Medellin) manages t o retain a significant portion (7.1 ~ e r c e n t )of ICETEX funds which are thus concentrated on two regions only. , A s a conclusion, one can say that the geographical distribution of ICETEX operations i n t h e public sector, while not closely following the distribution of the student population, allowsbackward regions t o get their share of ICETEX funds. On the contrary, such operations tend t o reenforce the already predominant position of the capital c i t y i n private higher education. 2. Student Loans and the Geographical M & S W ef - the Recipients School attendance, especially at the university level, is for many people an important reason t o migrate as institutions of higher education a r e necessarily more geographically concentrated than potential students. Table 1 4 highlights three phases of t h i s process of geographical concentration which takes place among loan recipients by showing the differences ( i ) between place of parents' residence at b i r t h ar,d at the time of application, ( i i ) between place of parents' residence and of applicants ' residence, and (i i i ) between place of applicants ' residence and of study. These migratory currents net, steady, outflow of personnel i n sixteen twenty one, meaning by t h i s that a varying proportion of people born i n these r e ions went t o l i v e and study i n other regions. I n four regionsd, the proportion of loam recipients by place of study is roughly the same (or slightly higher i n some cases) than by place of birth. Only one region, namely, Cundinamarca - with the capital city of Bogota, benefits from a decisive inflow - of personnel; less than a quarter of loan recipients were born there, but one third of parents' recipients already l i v e there a t ,9 the t i m e of application. Finally, 44 percent of applicants happen t o -6 l i v e i n Cundinamarca, a i c h is the place of study selected by more * than half of all loan Sxipients. s m To what extent ICETEX operations contribute t o shape these migration patterns is hard t o say. One thing is clear,hmever. ICETEX is only responsible for the differences between the place of Including s i x regions without higher education f a c i l i t i e s. -2/ Antioquia, Bolivar, Caldas and Risaralda.  applicants' residence and the place of study and only t o the extent that the granting of a loan has been a decisive factor i n the decision t o migrate. This is ffi issue on which no information is presently availa3le. The preponderance of Bogota can be explained on one hand, by several factors some of which have l i t t l e t o do with ICETEX, such as the city's quasi-monopoly on private higher education or the des:re t o live i n the capital city. How- ever, one cannot help observicg that t h i s monopoly is reenforced by ICETEX which grants more loans a r i b i g g e r loans t o students willing t o enroll i n the private u'iiversities of Bogota. The l a s t column of Table 1 4 gives an, idea of inter- city nigration within the same region. On an average, about orie I . loan reci3ient out of four has t o rrligrate from one c i t y t o another! , as a result of his university studies. Because migration usually .i , entails higher living costs wfiic.1 can be financed through ICETEX loans, it is probable that these loans are a t least partly :*. responsible for inter-city migration.l/ The foregoing considerations raise two fundamental .-, issues about the geographical allocation of student logns'; The ' first one has to do with the set of criteria used to allvcate loans. There is a priori no reason why the distributfm of loans should be s i m i l a r t o the distribution of the student population. ICtETM could choose t o favor some regions a t the expense of others and vice-versa depending on the policy obJectives pursued by t h i s institution. It could, for instance, diversify its operations geographically t o provide educational opportunities t o backward regions or, on the contrary, concentrate them on a few, well- established, university strongholds in order t o promote quality and efficient use of scarce resources. The dilemma is a real one and ICETEX cannot face it properly without reference t o its objectives as an institution. A t the same t i m e ,and t h i s is a second issue, the problem of university location and expansion goes fax beyond ICETEX attributions. In the same way, the aigratory currents of loan recipients are part of broader migration patterns which reflect the cverall economic and social structure of the country itself. In t h i s connection, the only way out for ICETEX is - related t o determine a sphere of relative autonomy withln which a number of explicit and limited obJectives t o the country's policies towards higher education a t large - could be implemented. vI. I C G P E ~ LOANS AND EQUALITY OF EDUCATIONAL OPPORTUNITY 6 A s from the beginning, the founding fathers of ICETM exp-ssed ;he hope that student loans could aqd should be used t o achieve a @re equitable distribution of educatioilal opportunities a t the higher education level. Tke idea was, and still is, t o provide able students wfio cannot afford university education with the financial L / ' ~ n c eit has been shown that higher education f a c i l i t i e s are available i n both cities.  help which would enable them t o continue t h e i r education. In practiced terms, t h i s means that ICETEX loans are t o be awarded primarily t o those students who f u l f i l l the two conditions of being bright and lacking the resources required t o pursue their studies. The purpose of t h i s chapter is to assess t o what extent ICETEX is indeed achieving this obJactive. 1. Student Lows and the Academic Ability of the Recipients In order t o make sure that loan rmzipients are among the brightest, ICETEX' internal regulations require from applicants t e s t scores not inferior t o the national average of fifty. ,The(,( . ' tests, although not compulsory, are usually required for i university admission and are, i n fact, taken by about 8@ percent .: of a l l high school graduates. They include aptitude tests for verbal ability, mathematical reasoning, spatial relations and abstract reasoning; achievement tests take the form of small examinations i n social sciences, chemistry, physics and b i ologyf/ As such, they are the only measure of academic ability so faar available i n Colombia. Test scores are distributed normally ' on a standard scale from zero (lowest score ) t o 100 (highest score ). The distribution of loan recipientsaccording t o academic ability is shown in Table 15. According t o t h i s distribution, less than 10 percent of loan recipients score 62 or less, while 77 percent of high school leavers are expected t o do so. Conversely, between 77 and 80 percent of a l l loan recipients score between 68 and 85 while less than 4 percent of high school graduates are expected t o do so. It is thus clear that the population of loan recipients includes relatively many more bright students than the high-school graduate population from which it is drawn. In no way may the former be considered as a cross section of the l a t t e r . it is worth observing that loan recipients enrolled in private universities are somewhat abler than their counterparts in public universities. In both cases, however, there seems t o be very f a r exceptions i f any, t o ICETEX eligibility criterion which states t h a t t e s t scores should not be inferior t o the national average of f i f t y . -.. - There is no clear relationship beheen the average size of loans and academic ability,though the loans granted t o students i n the private sector are, as usual, bigger' han i n the public d sector. The structure of loans vary very 1 t l e with ability though the sharp contrasts already observed between public and private universities are still with us (Table 16). More able students are not inclined t o spend more on tuition o r books - which could be interpreted a s a tendency t o seek the kind of advanced education compatible with t h e i r better ability - than do less able students. The t e s t s are administered by the National Testing Service ( ~ e r v i c i o National de rueb bas) of the Colombian Institute for the Development of Higher Education (Instituto Colombiano para e l Fomento de la Education Superior - ICFES).  2. Student Loans and the Socio-xr-w t!.e Recipients Law-income students are expected t o be the main beneficiaries cf ICETEX lending operations. In order t o achieve t h i s goal, ICETEX regulations s t a t e that no loans w i l l be granted t o students whose yearly family income was In excessofabout ~S$10,000i n 1971 for a f 6 l y with two dependsnts.ll As w i l l be seen later, borrowers ha-re, on till average, between 5 and 6 brothers and sisters; the typical f&nily thus comprises between seven a d eight dependants. A 10 percent extra income is tolerated for each additional dependant, which boosts the average t o t a l income ceilings t o about ~~$13.000 . J a y e a r , / t h a t is about s i x times as much as the average famitly in- , ,, 1 , came in urban Colombia. V t v t I I n order t o assess the role of ICETEX in achieving more equality of educational opportunity, the social composition of the laan recipients' popula+,ion must be compared with that of the stkdent body a t large. This is not an easy task i n Colombia as . . very limited evidence is available on t h i s subJect ."-Ir, T a 3 h -&'i*' * the income distribution of loan recipients is compared wfth tk.at - of" high school leavers from which the student -bw-a&large and the borrowers' population are drawn.2/ First, it should be noted that, though the upper income group of the income distribution is oppn-ended, it i s clear that there are very few exceptions, i f any, t o the income l i n d t imposed by ICETEX. Second, the differences beltween the two dfs::ributions look surprisingly small. I n other wotds, the social cor,position of the loan recipien;s'population is similar t o that c-.' the high s c h ~ o lleavers' population. This finding is clearly disturbing since it implies that ICGTEX loans are allocated t o each income group proportionately t o t h e i r importance i n the t o t a i eligible population withour, any preference for low or middle level income groups. No redistrf-bution of educational cpportunities i n favor of those groups is thus l ~ k e l y t o take placsthanks t o ICETEX loans. This rather disappointing conciusion should not, however, be considered as the definite word on the subject,for two reasons. ~ i r s t ,the income data raised by ICFES might be of dubious quality as no justification of declared incomes is requested from school- leavere. Under-reportingis, therefore, likely t o be high, thuo leeding t o - perhaps seriously - underestimating the redistributive asgect of ICETEX lending operations. Second, ICFES data refer t o hi& school leavers and not t o the actual student body. I n Colombia, the social composition of t h e l a t t e r population is probably more biased . Net earnings s h ~ u l dnot be i n excess oflO0,OOO Pesos a year, i.e., about ~ ~ $ 5 , 0 0for a family with two dependants. 0 In addition, the ceilings for net assets is put a t 700,000 Pesos. A 15 percent rate- of-return on those assets w i l l yield an additional yearly income of ~S$5,000. Applicants axe requested t o prcduce a copy of the hea&of- family income tax returns for the previous f i s c a l year as prcof of itheirdeclarations. 2J fibout 260,000 Pesos . 2/ In the absence of any data on the social composition of the Colombian student body, ICFES data on high school leavers were used.  i n favor of tne privileged groups than that of the forner as the s t i f f entry requirements set up in most Colombian universities may be more easily fulr'illed by the upper income groups than by t h e i r l e s s privileged counterparts. I f t h i s were the case, then ICETEX policies would lead t o a redistribution of educational opportunities as the social composition of lcran recipients would be less biased than that of the student body as a whole. This conclusion borders on speculation, however, and opinions m y difrer on t h i s point as long as a systematic survey of the social composition of the student body is not carried out. Perhaps ICETEX i t s e l f should take tht: initiative i n such a survey as part of a self-eraluation program o f i i t s activities. :'. , ,% , For obvious reasons, th; i&t;of studemt loans^ oo;qu81ity of opportunity can only be f e l t within the 'social domposltion-of the eligible popu1ationr;hich may not represent a crcss-section of the Colombian society a t large. The beneficiaries of ICETEX loans may, t o a certain extent, cone from poor student families but those families are probably bet* &f , t a g ,@os: poor families since they managed t o put their children through tu+* w C t . ., secondary education, which is by no-means a ?erformance whi.chrw be afforded by everybody i n the Col-ombian contexlcr, -.%o, extent t o which ICETEX loans are actually fostering educational opportunities f o r the poor is bound t o be all the more limited sirtce the process of social selection which takes place during the firs: twelve years of schooliwr is severeel/ Table llbseeks t o compare the social composition of the Colombian active population with that of loan recipients. It shows that the "professional" class is more heavil;- represented among loan recipients tha? among tb? t o t a l or urbrn active population. Conversely, .only 11.2 percent of loan recipients have a working class origin while manual workers account for 36 percent of the actire population i n urban areas. In the same way, farmers account for o~e-thirdof all active persons bu only 11.5 percent of lotn recipients coae from farming families. b Yurthermore, the data on average yearly income by occupational categories shcnr that the fathers of loan recipients are, as an average, much better off than the average person in the occupa*ional category t o which they belong. Part of the difference should certainly be a t t r i k t e d t o the fact that the data on occupational incomes i n tl&active population refer t o individual incornes2/instead of family incomes for the fathers of loan - * s 1/ This point j.s doc&-n "r3ublic Expenditures and Income Distribution i n ~olombia", by Jean-Pierre Jallade, World 3ank Occasional Paper No. 18, The Johrs Hopkins Press, 1974. 1/ It is interesting t o note that this proportion is only slightly superior t o the proportion of farmers among che active population living i n urban areas. It suggests that "urban farmers" are sufficiently well-off t o send t h e i r children t o universities and get advantage of ICETEX loans something which-most "rural farmers" cannot afford t o do. No data on family income by occupational grou~ingsare presently available i n Colombia,  recipients. But still, it is hard t o believe that the additional incomes generated by other members of the family could result i n family incomes camp..-nble t o those of loan recipients, especially i n the case of manual workers an2 farmers. Thus, i n s p i t e of ICETEX intentions, the population of loan recipients remains strongly biased i n favor of t h e privileged groups when compared t o the Colombian society. 3 i s is so partly, as we have seen, because its social composition is similar Lo t h a t of high school leavers at large and p a r t l j because high school leavers a r e themselves an e l i t e within the Colombian society. This suggests two s e t s of alternatives f o r ICETEX if t h i s institution is t o be more effective in bringing educational opportunities t o the poor. First, the loans could be more clearly concentrated on low-income. recipients, especially i n private universities. Seco~d,ICETEX i n t e r v e ~ t i o ni n the educational process should occur before the f i r s t year of higher education. Needy students should be helped financially a t the secondary and even, i n 'the case of thp- r - x a l population, at the primary level i f they a r e t o have access t o hjgher education. ICETEX is actually moving i n t h i s 4 directiol as it has ,een recently put i n charge of the small - fellowship program f o r high school students previously run by the Ministry of Education. The distribxtion of loans according t o family income i n public universities is compared with the corresponding distribution in private universities i n Table 16. In makingsuch a comparison, one should bear i n mind that private sector recipients are much better off than public sector recipients: average family income for the former grclu? is 73,900 Pesos as against 39,000 Pesos for the 1 a t t e r . y Furthermore,' the distribution of income among private sector recipients is also much more unequal than among public sector recipients: the bottom two income groups account f o r 9.9 percent of income i n the former as against 25.5 percent of income i n the l a t t e r . A t the other extreme, the top two income groups get 72.1 percent of a l l incorre i n the private sector as against 45.8 percent i n the public sectol.. I n the public sector, 63.9 percent of all loans and 62.3 percent cP the funds go t o students with a family income - - of 36,000 Pee03 o r less, as against only 39.1 percent and 35.6 percent reepest vc i n the private sector. Conversely, high income student3, 41 i ly L n the public sector receive 13.7 percent of all = loans and 14.4 oP *,he funds as against 34.7 p e r c e ~ tand 39.5 percent i n he private sector. "Sircent * I I n the public sector, loans are, Oh an average, 30 percent smaller and families 10 percent bigger than i n the private sector. 1/ See Table 19. 1/ Students conirig from families earning 72,000 Pesos o r more.  In both sectors, family size reuains cor~stantas income rises but the average sizt of loans to students in the private sector shows a sharper tendency to increase with t!le level of family inc9me than in the public sector. To sum up, ICGTEX lending operations are far more sharply redistributive in the public sector than in the private sector. ICETEX funds going to public university students are more likely to reach poor students and are more equitably distributed than those going to private university students. In addition to family incane, fathefls occupation Mas {also used to assess the socio-cconomic origin of lorn recipients~ Table 19 shows the distribution of loans according to six broad I occupational categories, including a category "NO ~nswer"which is numerically important because it comprises the numerous "~eceased ath her". In both public and private universities, over one-third of loan recipients are sons or daughters of "clerical and Sales Workers". For short, they have what csn be -Zsal1&-~---,, "middle-class" origin. The "~rofessional, Managerfa1 b d " 1 Proprietors" group is somewhat more represented in the pri~ate than in the pul-iic sector: 19 percent as-against 13 percent of loan recipients respectively. the proportion of recipients with a "wcrking class" origin- in public universities Converselllf is nearly twice as hi* as in private universities: 13.6 as against 7 percent respectively. The size of loans is not related to father's occupation in the public sector. As a result, the various social groups maintain their shares in the total amount borrowed. In the private sector, the share of the "Frofessional, Managerial and Proprietors" group climbs to 21 percent thanks to loans which are 11 percent bigger than the average loan in this sector. The comparison of the distributions of loan recipients according ta father's occupation between public and private universities may actually underestimate the differences between the two sectors if the huge differences-in income within each occupational category r S o are disregarded.l/ In tho public sector, the femily income of loan recipients with a working class father is less than half the corresponding imily income in the private sector. The same thing holds true for loan recipients coming from fanning families. In fact, surprisingly enough, the highest occupational group in the public sector which is the "Profebsional, Managerial-and ~roprictors" g r m p earns about the same income as the lowest occu ational group in the private sector, namely, "~anualWorkers". g Does the structure of loans vary with the socio-economic origin of the recipients? One could a priori expect that poor students vill devote a higher proportion of their loans to maintenance expenditures and/or that rich students will be inclined to select more a Manual workers. See Table 19.  expensive educatioa, thus spending more on tuition. Table 20 confirms this hypothesis t o a large extent. I n both the public and private sectors, loan recipients spend more on tuition and less on maintenance expenditures a s family income increases. In private universities, loan recipients from the professional class devote 12 percent of their loan t o maintenance expenditures as against 24 percent for loan recipients with a farming origin. Conversely, the l a t t e r spends 63 percent of t h e i r loans on tuition as against 82 percent for the former. In public universities, however, there is very little variation in the structure of loans according t o father's occupation, probably because of the greater social homgeneity of .r:t the student body. - I' j , I 1 . i '.:'. A l l i n a l l , the ability of ICZTEX t o achieve more equality of educational opportunity is rather limited. The lending policies pursued i n the public sector do contribute t o finance educational opportunities f o r the poor but this trend is, t o a large extent, offset by those, far less redistributive, pursued i n the private sector. 3. Allocating Student Loans Accordinu to the-Socfa-Ece~amQ Origin and Academic Ability of the Recipients The often stated objective of I C m X , which is t o grant loans t o needy bat bright students, may be frustrating in practice t o the extent that superior academic ability is perhaps associated with favorable socio-economic background. If true, then l o w which should be granted t o bright students on ability grounds should be denied t o them for economic reasons, and conversely, poor students who should be helped may not be bright enough t o be eligible for loans. Table 21 shows that these hypotheses do not hold true. In fact, loan recipients' academic ability appears t o be remarkably independent from their family income. About 80-90 percent of recipients are concentrated i n the 68-85 ability range a t a l l levels of income i n both public and pri,vate universities. The only exception t o this rule is the above-average proportion (21;7 percent) of very rich, private university students (over 120,000 Pesos/year ) concentrated i n the highest ability rsnge - beteeen 93 c.nd 99. Apart from this, there'seems t o be enough bright students i n each income group t o permit $e meaningful enforcement of ICETEX selectiol; policies. - * This comlusion should be slightly qualified with regard t o the distributfon of loan recipients by academic ability and father's occupation able 29. In public universities, the proportion of low a b i l i t y ( 0 t o 62) students increases from 15 percent i n the professional group t o 25 percent i n the nanual workers' groups. A s a corrolary, the proportion of students in the middle-ability range (68 t o 35) decreases from 73 percent i n the fommer group to 60 per- cent i n the latter. In other words, some kind of association between ability snd social oiigin can be observed. This conclusion -  which does not hold i n the case of private universities - should not be taken too far. ICETEX is, in fact, able t o select plenty of bright students with a working class origin and the socially privileged recipients are not necessarily the brightest. How f a r could ICETEX go i n stiffening one e l i g i b i l i t y criterion without impeding the enforcement of the other criterion is not clear. For instance, a selection policy aiming a t selecting only the brightest student by raising the academic a b i l i t y hurdle could result irr a certain amount of discrimination against socio- economic groups with limited untspped reserves of ability: those groups would, of course, be the socially under-privileged groups t o the extent that the t e s t s already discriminate against them. Conversely, a policy emphasizing the selection of socially wder- privileged students may imply a loosening of the a b i l i t y t e s t for the same reason. In the absence of any data on reserves of a b i l i t y by socio-economic groups i n the student body, one can a?ly.spcEu&atd on t h i s matter. Perhaps, it may be useful t o recall at tkisctstsge' that loan recipients represent only 10 percent of -th-e- studeat--- . - population and that the minimum a b i l i t y reqtiited t o be select ,r! for a loan is an average of fifty on a set of tests designed for the entire high school leaver population which has already been socially screened during the f i r s t twelve years of schooling. It is thus highly probable that ICETEX has some room for manoeuvering here which would permit a stiffening of one e l i g i b i l i t y criterion without he-ering the enforcement of the other one. 4. Sources of Student Finance by Socio-Economic Oriuin ICETEX loans are onlj- ane source of student finance used by students t o complement other sources of finance such as family help, part time work and the like. This raises, it seems, two questions: First, are these loans actually indispensable t o all recipients regardless of socio-economic origin? And, second, t o what extent do students tend t o substitute one source of finance - loans for instante - for others because of their socio-economic origin? Table 23 presents the evidence for public qpiversities. The average amount of-finance available per student rise3 steadily with family income resulting in an average "over-financing" of about M percent, which is not a big margin given the uncertainty surrounding yle a ~ r i o r evaluation of expenditures and sources ' i the costs of studies do not, however, vary monotoni over-financing is not clearly associated with family income. The share of ICETEX loans i n t o t a l student finance de- creases steadily as income rises, while, surprisingly enough, the share of family help remains practically constant - around 20 per- cent of the total. Students tend t o substitute wages, rather than family help, for loans as family income rises. The use of father's  occupation as a proxy for socio-economic origin instead of family income tends t o confirm t h i s financing pattern. For instance, i n the case of loan recipients k%o are sons of manual workers, the share of ICETEX loans i n t o t a l student finance amounts t o 69 percent, that of family help t o 22 percent while that of wages is negligible (0.2 percent), as against 59.4 percent, 21 percent and 12.7 percent respectively for the loan recipients coming from the professional group. I n spite of these variations, ICETEX loans remain, by far, the most important source of student finance a t a l l Levels of socio-economic origin. Even richer students; do not seem t o be ..j i n a position t o Substituteother sources of finance for l h s 11 easily. This being said, it is amazing that high income or socially privileged families do not contribute a higher percentage t o student financing than low income o r less privileged families. Perhaps they do so thro-agh helping students t o get a job and earn wages. Certainly, t h i s possibility of non-monetary family -. help,together with the provision of housing, food and clothiug;~: cannot be overlooked. But still, one is l e f t with t& feeling that these families are a potential source of student finance which - - could be, t o some extent, substituted for loam; Student finance i n rivate universities shows a nunber of distinctive features (Table 2 1. First, the average amount of % finance available t o loan rectpients is more than 50 percent higher than i n public universities. Second, it is not clearly associated with socio-economic origin. For instance, the amount of finance available t o recipients coming from working class families is roughly similar to the amount available to students coming from the professional group. Third, "over-f inancing" reaches close t o one- third of t o t a l costs and is widespread among a l l social gr0ups.Y Fourth, the share of loans i n t o t a l student finance is not clearly agsociat with social origin: it is highest for urban middle class studentd'and smallest for working class students.U Fifth, unlike i n public universities, wages are a significant source of finance for low income, under-privileged students. For instance, they account for 29 percent of t o t a l finance available t o load recipients , coming from working clas8 families. Lastly, family help is, as expected, 1/ Om-financing is particularly high in the case of loan recipients - wi-;h a working class origin. It is due to the lower costs of the studies selected by these students. 2/ S9n8 of "Clerical and Sales" workers, Sons of "Manual Workers1'.  clearly associated with socio-economic origin: it amounts t o 26.5 percent for recipients coming from the professional group as against 15 percent for working class students. These l a s t points illustrate the familiar pattern whereby rich students may rely on family help while poor students are obliged t o supplement the financial help received from their families with part time work. Should ICETEX loans t o students er-rolled in private universities be smaller because of general over-financing? The answer, it seems, should be positive given the fact that low-income, under-privileged, students would not be hurt by such a move. Perhaps the reduction should also be bigger for trpper~.classstudents who - could thus be inclined t o seek part tiae,vork~thanfor working c-8 students. To sum up, the analysis of the patterns of finance available t o Colombian students according t o their socio-economic origin suggests some alterations t o ICETEX lending policies. For instance, f a m i v help cmld, t o some extent, be W p t i t u t e d for lo_ans ,-;- . the high-income, socially privileged, studerk8;: errrobled &b%c universities. In the same way, part time work could \)t .enroura&ed and over-financing discouraged among w e l l - &-S- ~&V&W~- students. In both cases, this would allow ICEX'EX t o shift some additional resources t o less privileged students. Such a move would be consistent with the financial constraints within which this institution is working as well as with its emphasis on the problem of equality of educational opportunity. VII. SmJDElJT L3ANS AND THE INTERNAL EFFICIENCY OF THE EDUCATION SYSTEM Student loans are often expected t o contribute t o in- crease the internal efficiency of the educational system by lowering the drop-out and repeat rates among students. Common sense indicates that they may do so provided that they are granted selectively and that they are big enough t o be considered by students as an incentive t o vork harder. From the public policy viewpoint, this'side-effect of student loans is important as it may help t o keep down the total public outlays t e r graduate by decreasing the average number of years spent by students i n the education system. - 9 To what extent is t h i s the case of ICETEX loans? Both $heir size and the importance granted t o the ability criterion i n #e selection process should make them a useful policy tool t o promote efficiency. It is difficult, however, to pinpoint the actual influence of ICETEX loans on the efficiency of the recipients i n pursuing their studies in the absence of data on the efficiency of the Colombian higher education system as a whole. Even if there were such data, their usefulness for the sake of comparison would be limited because the population of loan recipients is not supposed t o represent a cross-section of the student body. Both populations  differ on various grounds: sex, type and place of study, socio- economic origin, academic ability, etc. Any comparison aiming a t assessing the impact of loans on efficiency should attempt fkrst t o control for these parameters. To take a single and pretty obvious example, it is of l i t t l e use t o know that repeat rates of loan recipients are lower than those of the student body i f the loans are granted - a t least partially - on ability grounds be- . cause there is no way of determining whether the above average performance of loan recipients is due t o the loans as incentives t o work harder o r simply t o their above average ability. , No attempt has been made in t h i s paper t o design a control group with the same characteristics as the loan recipients p~pulationfor comparison purposes. The evidence on repeat rates, based on a cohort of loan recipients followed over the 1969-72 ptriod is presented i n Table 25. The overall repeat rate over a four-year period for the whole population of loan recipients is 15 percent, which is, by a l l standards, rather low. Ldan recipients i n private universities fare distinctdyd&better than t h e i r counterparts in public universities: 9 perc&tr as wainst 18 percent. Unfortunately, there is no way of checking if this also holds true f o r the two student bodies as a whole. Siurprisingly, students coming from low-income, working class fkmilies repeat less than their more privileged colleagues. Mddle class recipients, 20 percent of which are repeaters, ex- hSbit the worst performance in this respect. There is a close and inverse correlation between ability and repeat rates: the least able recipients repeat five times as much as the most able students. The fact that the lowest repeat rates are found among low-income, very able, students cannot be explained by the c~ncentrationof the able among the poor as we have seen i n the preceding chapter. It may, rather, imply that ICETEX loans are a stronger incentive t o work for poor than for rich students. In that sense, the loan scheme might result i n some savings of p~blic~money.This being said, the poor performance of the nhmerically important group of middle class students s h h d draw the attention of ICETEX authorities.  VIII. STUDENTS' ATTITUDES TOWARDS ICGTEX LOANS The issue of students' attitudes towards loans is often disregarded both in literature and in practice. This is a pity because the question of attitudes is of crucial importance in the final evaluation of a loan scheme. It is one thing to propose a loan scheme for a given target group; t o have individuals in these groups actually take advantage of the loans is quite another matter. The gap between theory and practice may be substantial here. After all, the benefits from enrolling into a univeraity thanks t o a loan, have t o be weighed against the burden of incurring long-term debts right a t the beginning of, one's ,lifetime. For most student&, the decision w i l l be surrounded by many uncertainties - uncertainties about the actual costs of studies, about graduation, about getting a job t o repay the loan - t o name only a few. Under those conditions, it is highly probable that attitudes w i l l play a major role i n the student's decision t o borrow. Tor the public policy maker, a wong - too optimistic i n most cases - assessment of students' willingness t o borrow may cause t e whole scheme t o go astray and miss the target group aimed at.$ Park@e*re., in L- - .. country like Colombia, students' attitudes towards loans can kqrdly be separated from the more general problem a f - ~ t t i t u d e towards s higher education, family lifestyles, enployment after graduation- and the like. In the absence of an ad hoc survey of students' attitudes towards loans, it is difficult t o document this issue properly. Some scattered evidence, gathered by the National Testing Service of ICFES, exists however. It is presented in Table 26 which seeks t o assess the influence of family income on students' attitudes towards higher education, higher education finance and student loans. The f i r s t observation t o make i s that family income has no influence whatsoever on the willingness of high schoal leavers t o undertake university studies. This willingness is virtually absolute for both men and women. In other words, once a student reaches the last grade of high school, there is only one desired course: t o go t o a universit The ideabf dropping o ~ att this stage simply does not exist. 9 - - l-/abovediscussionalreadypresumes.thatthereisno"information The !- gap", namely, that all potentially eligible students know about the existence 'of the-loan system. This condition is probably - fulfilled in Colombi. as ICETEX documents are mailed t o high S- school leavers togeuer with ICFES invitations t o sit for the a tests which are required for university admission anyhow. This does not mean that there w i l l be no drop-outs as most Colombian universities enforce s t i f f entry requirements t o ad3ust the demafid for places t o the available capacity.  i Reliance on family help t o meet expected expenditures is idespread as seven students ollt of ten mention it as t h e i r main ource of finance; it also increases drastically as family income ncreases: less than half of poor students intend t o rely on amily help as against 80-90 percent of rich students. Only 12 rcent of school leavers expect t o finance their studies mainly hrough loans; t h i s proportion is highest (22 percent) f o r the ottom income group and close t o negligible for the top two in- ome groups. A similar pattern emerges for wages. The willingness t o apply for an ICETEX loan is closely inversely related t o income as 60 percent of male high-school :.\ vers i n the bottom income group are potential 'applicants as. inst 24 percent i n the top income group. The same pattern holds e for female school leavers whose willingness t o bpply for ans is, on an average, always lower than that of males: 38.5 per- nt as against 48.1 percent. This can probably be explained by e fact that working a f t e r graduation and getting an adequate t o secure repayment of loans is surrounded by mm.e...upcertainty ng women than among men. The discrepancy between the*' f@&%ngoir '-* ich imply an acute awareness about the usefulness of loans as 11as a high willingness to borrow, especially among low iacme ups, and the previous ones about the rather restricted importance I C m loans as the main source of finance, is only apparent. simply reflects the complementary character of such a source of name i n the minds of students who, as we have seen, show a rsistent tendency t o rely largely on family help. While students from lov-income groups show a stronger t o borrow than t h e i r more privileged counterparts, tend t o request smaller 1o-s. For both average size of loans reauested increases with males, the average loan requested by s~udents is 43 percent higher than that requested incme group; for females, it is 57 percent , , bans requested by females are, on an average, about 12 . rcent louer than those requested by males: 6050 Pesos as against 0 Pesos. When t h i s finding is viewed i n c o ~ e c t i o nwith t h e i r - - e r propensity t o borrow already recorded, one must conclude that is an important factor in the shaping of students' attitudes -?. rds loans and that women are, t o a certain extent, discriminated against - - loan system. Unfortunately, there is l i t t l e that ICETEX can o increase the willingness of women t o borrow except, perhips, oviding them with more information and lover interest rates 80 leviate repayments. While the former cbnnot do any harm, th; ctiveness of the l a t t e r is doubtful insofar as attitudes are partially responsive to strictly economic incentives. This being said, ICGPEX can do a l o t t o correct the dis- i n the size of loan resulting from both sex and low by actually granting t o those groups who request l i t t l e  r higher proportion of the money requested than the proportion granted t o the privileged groups who request more. This is exactly rhat ICETEX is, t o a limited extent, doing for women. As Table 26 shows, women receive 83.1 percent of the money requested as against 77.9 percent for men. The difference is not big enough, however, to offset the difference in the amount requested. I f women were t o ,e granted the same loans as men, they should, on an average, receive 30 percent of the money requested. On the other hand, no corrective policies espear t o be implemented by ICGTEX in order t o make up for the propttnsity of low-income groups t o request smaller loans than high incoue groups as roughly the same proportions of the money requested are actually granted a t a l l income levels. : t To sum up, the attitudes of Colombian students towards th$ loan scheme operated by ICETEX cannot be held responsible for any '.: major social discrimination i n the running of the scheme as both the'. expectations and attitudes of low-income students towards borrowing are j u l t as high and even higher than those of t h e i r more privileged counterparts. ICETEX should, however, be aware of the tendency of both poor students and female students t o requesk .loans than do rich o r male students. The resulting discrimiaation eouXcf-~i.w%. ,, be removed by granting a slightly preferential treatment t o the loan requests coming from these groups. IX. STUDENT LOANS I N COLOMBIA: A SUMMARY In the preceding chapters, an attempt was made t o assess the performance of the student loan scheme operated by ICGTEX in Colombia. This was done by discussing the extent t o which ICETEX lending operations have actually contributed t o implement the objectives s e t forth by policy-makers for t h i s institution. A s usual, in t h i s sort of exercise, the emerging picture is a mixed one on which a definite stand is hard t o come by for various reasons. First, the objectives are not defined i n a precise, measurable manner. A s such, they are subject t o a certain amount of, possibly questionable, interpretation by the analyst. Second, the lack of a control group which, in this case, can only be the Colombian student body a t large, introduced a speculative element i n the inferences drawn from the results of the analysis, ,And third, the sheer complexity of the daily operations of the loan scheme i t s e l f re- quires a certain amount of simplification which is difficult t o achieve without distorting the overall picture. In s p i t e of all these shortcomings, howevir, a number of solid points concerning each of the three main objectifes of ICETEX have emerged from the analysis. - They are suplparized below. - In connection wfth the role of ICETEX i n the financing of higher education i n ~ o l o ~ i the a , hard facts are, f i r s t , that ICETEX loans are heavily subsidized through low interest rates; as a consequence, there is little chance that the loan scheme run by ICETEX could ever become a revolving scheme, that is, a scheme by which present loans could be wholly financed out of student repayments of past loans. The steps recently taken by the Board of ICETEX t o  the interest rate on loans w i l l certainly improve the situation This w i l l not be enough, however, a s ICETZX lending must expand t o keep abreast with expanding emol?-ments in The ;;econd hard fact is that the loans cannot be considered a s a source of finance for public universities simply because these e r s i t i e s do not charge (significant) tuition fees which could be ced through loans; they are, however, a small source of finance e universities as they are used for financing the tuition ed t o the students. The limited impcrtance of ICGTEX loans e financiag of Colombian universities is due t o the fact that I n fees which could be financed through loans, account for r 11proportion of university finance. When the loan scheme ed, very l i t t l e , if anything, was done t o a l t e r the pattern ng of Colombian universities with a view t o i ~ c r e a s i n gthe es i n the overall finance picture. This would have implied 4 an increase In the tuition fees charged t o students, a step that ed cational authorities found politically impossible -to.takm.iras.-_ --. . . t h Colombian context. The upshot of a l l t h i s is that the loa% . - sc eme run by ICETEX i n Colombia can hardly be considered a s a t 1 t o shift the burden of higher education away from taxpayers t o - st dents but, rather, as a cheaper way t o channel additional funds&/ . t o private universities and public sector students than would be thd case with a system of outright grants. i In the absence of any reform of university finance, it is ha d t o see how ICGTEX performance could be improved i n t h i s area. Mo eover, the present state of affairs according t o which private un versities get more out of the (subsidized) loan scheme than pu l i c universities appears t o be a consequence which was not intended according t o which the former group is, economically, t h e latter, it is hsrdljr a healthy situation and was by IC- founders. The influence of ICETEX loans on the supply of educated e r is two-fold: First, subsidized loans contribute t o increase demand for education by making it cheaper f o r indivhuals it. Second, by concentrating loans on such fields &f study ngineering, medical sciences, agricultural and business - nistratidh, ICETEX has a clear impact on the structure of tlk * t This being said, ICETEX lending policies may be even more s e l ctive by increasing the "incentive power" of loans. Why, for ins ance, finance the same proportion of costs i n a l l fields of stadyl The various fields of study could, for instance, be classified into p r i b r y , medium and low priority with the loans financing a decreasing IS! 4s assessed by the grant element attached t o each loan.  1 ' proportion of t o t a l costs. Such a classification would clarify: (a) which recipients can actually be considered as "additions" t o the non-recipient student body and (b) which recipients would I I have enrolled even without loans. The emphasis on the above-mentioned fields of study has changed very little over the period and no systematic reassessment of the manpower needs of the economy seems t o be underway. Perhaps lCETEX could also envisage, i n addition t o the setting of new man- power priorities, an extension of its contribution t o manpower policies i n Colombia by granting some hind of preferential terms of repayment t o these loan recipients who.actually enter an occupatien related t o their training o r who accept t o work i n the priority .; areas - such as rural areas -as defined by the employment policfes: of the government. ICETEX1s ability t o increase educational opportunities is evidenced by the fact that the overall distribution of loan recipients according t o family income is yq &%&4&k't$ t!UC Qc"' ..., A - ee; high school leavers and, probably, more equitable t h a t h a t of the student body itself. Tuo groups of students tR%imma. f i r s t or second year students - benefit-less from ICETEX operations than entitled t o by their numerical importance i n t h e student body. The redistributive impact of ICETEX lending policies igmoreover, entirely due t o the lending operations in the public sector. In the prive sector they sometimes seem t o be counter-productive, as they emphasize bigger loans t o socially privileged students who study in the universities located i n the capital c i t y of Bogota and who tend t o select prestigious fields of study such as business administration at the expense of others, such as agriculture. A l l i n all, the student loan scheme run by ICETEX shows a rather limited ability t o bring educational opportunities t o those who lack them. The ways and means t o sharpen the redistributive impact of this loan scheme vithout going beyond ICGPEX1s traditional f i e l d of activity, which consists i n lending money t o university students, do exist however. Some of them are l i s t e d below: , - t o lower (or alter) r/the income criterion for - eligibility; t o give a preferential treatment t o requests - for study outside big cities; t o gear the size of loans more closely towards the needs of applicants and less towards the - price (tuition) of educaticn; t o take a close look a t ail the alfernative sources - of finance available t o applicants; t o relate the interest rates of loans t o the means of applicants. 1 In this connection, the use of the information on family assets made by ICETM authorities i n granting or denyin(; loans is not I clear.  As ICETEX lesponsibilities are presently Seing enlarged so as t o include the responsibility for the management of scholar- ships t o high school students, t h i s institution is put in a position t o exert a decisive influence on the d i s t r i b u t i ~ nof educational lopportunities among the Colombian population. Given the level of educational development of Colombia, subsidizing the poor through- out secondary education is probably a necessary step i f one is t o have, a t the level of university entrance, a student body whose social composition rouefily resembles that of the Colombian (urban) population a t large. There is, thus, little doubt that a scholar- ship program a t the high school level could, i f properly designed, , , lenhance the ability of ICETEX's lendil? program f o r h i h e r e d ~ c a t i a ~ . Ito redistribute educational opportunities for tine benefit .of those . . Who lack them. Whatever policy course ICETEX selects i n the future, it is fair t o say that this institution has so far suffered from a pevere "information gap" which makes the on-going self-evaluation of its activities a difficult and tinie-consuming twk.-- ThiS-gap. - kakes a t least three aspects. e First, too little is known abaut the ~olombianstudent ody a t large. Although ICETEX cannot pretend t o substitute for he relevant authorities i n gathering data on post-secondary bducation, its needs are specific eno-ugh t o justify some sort of burvey of the student body with special emphasis on the socibeconomic Origin of students and the sources of finance available t o them. 4s w a s mentioned repeatedly throughout t h i s report, such information *auld be extremely valuable i n many respects and, above all, In assessing the influence of ICETEX on the distribution of kducational oppcrtunities . I Second, the lack of knowledge about student budgetSis also f onspicuous. In the absence of any independent data about students xpenditures, ICETM has t o rely on applicants' declarations i n rder t o determine the size of a loan. This is hardly a satisfactory tuation. The raising - possibly with student's cooperation - of me objective and accurate information about students' needs uld clearly be of great help not only t o ICETEX but also t o t h e tudents themelves . t ~ h k d ,the country's priorities i n terms of skilled manpower eeds h ~ v es e n set forth long ago and need some up-dating. This provideJCETEX w i t h an opportunity t o go beyond the straight- orvard r e l h c e on traditional manpower forecasts. What is a t take is noeonly the ability of ICETEX loans t o increase enrollments n a given ffeld of study but also students' propensity t o actually nter occupations related with their training. In other words, ICETEX worrying about what happens t o students a f t e r graduation d, above all, during the transition period from study t o work. A analysis of loan recipients during t h i s period aiming a t  taking the pulse of the labor market for the various types of graduates would yield the type of infonuation which, once fed back into ICETEX' selection procedures, would kelp t o arrive at a better . match between the supply of skilled manpower and available job opportunities X. STUDENT LOANS: LESSONS F'i3OM THE COLOMBIAN EXPERIENCE The lessons t o be drawn fram the ICETEX experience vith student loans go, it seems, f a r beyond Colonibia. Among other things, t h i s experience gives some clues as t o whether or nol; countrists with a level of economic and educational development similar t o that of Colombia should embark on student loans3 In,this connection+ the analysis presented i n t h i s paper has shuun t h a t at lesst three conditions must be met i f t h i s question 'is to be answered * p f tively. The f i r s t condition is t o consider student loans for what they actually are, i.?., a policy tool t o achieve such educational obJectives as altering ( i ) the size and structure of the supply of educated manpower, ( i i ) the social composition of the student body, and ( i i i ) the w u n t and the origin of funds dR~c&8d-.++ . education. I f eny of these alterations m e -a&dklI.y .needed p - b ? given country, then loans can be envisaged.) The'second condition refers t o the need for carefully a p p r a i s 4 a p % s ' ~ k ~ t i n gsituation i n terms of educational opportunities, financial arrangements t o meet the cost of education, relationship between the supplr of nan- p e r and the labor market. Lastly, it is necessary t o wciqh the ability of a loan system versus other student aid policies t o achieve the expected objectives. 'i'h2se three points w i l l now be zeviewed i n turn. ( i ) Student loaos as a multi-purpose policy tool The definition of policy objectives t o justify student loans or, f o r that matter, student aid policies i n general, is a step which is too often overlooked by policy-makers. This absence of goals is, t o a large extent, responsible for the frustration surrounding debates centering cn the question of "student l o a ~ sor npt,student loans". Not only are brcad policy objectives t o be wreed upon f i r s t , but they also condition the type of loan scheme t o be implemented. I n t h i s respect, the rich experience oCColombia shows that there is no rigid, universal~relationshipbetween the objectives sought for and student loans per se. Whether a s e t of objeczives w i l l be achieved o r not depecls entirely do the particular characteristics of the loan scheme undgr consideration. To put it otherwise, there are nearly as many types of student loans as objectives considered. For instance. i f equity is considered 8s one important goal of the scheme such as i n the case of Colombia, some regulations restricting e l i g i b i l i t y t o low income students must be included ir the scheme. If this is not the case, as in Sweden where the main goal is t o shift the burden of education costs from  parents t o students, then laans must be available t o a l l . It is thus indispenscble to define the objectives of the loan scheme i n a coherent manner since they cormnand everything else. I n the field of education, policy-makers rnd planners are often pursuing different, conrlictinq, goals at the same timat. The temptation t o u c t i new policy tooi sucl. ss #:ttdcnt loans to ashicvc everything a t the seae time is slwrrys 3resePt. The present pal;er has shovr~t?i:ct the s-ydent loan scheme run by IZETEX is no e::ception to t h g s r ~ l e . Examples sf conflicting goals abound. ;For'inst0.nce, i f ICETEX loan3 ~ l r e t o beco-e a more iniport2f source of university fil~ancethan they are now, emphasis should be put on loans t o students enrolled i n private univdrsities. Such a policy would jeopardize, however, effcrts t o achieve a more equitable distribution or" educational osportunities as private universities tend t6 ed- ' r o l l socially privileged students. It may also counter the attempts to provide the econcnqYcnqy'With such needed nmnpover as agricultural graduates who are trained exclusively i n public universities. The ~ b j e c t i v eof providing the economy with an adequate supply of fducated macpover my elso, j some caees, run against equity. For instance, the 10% .mapower priority granted t o teaching is detrimental t o such educationally under-privileged grov;? as femaie sf .uents ut.0 have a high pr3pensi.q tc select this field of study. hother possible conflict, not Eocumented i n the present paper, between the provision of adequate manpower and the search for equity arise over the qual:.ty of educstion: efficiency calls for exclusive reliance or. the lkng established, high-quality, educational ceaters of big cities while squity requires, onathe contrary, a geographical diversification of educational facilities. In a more general wny, the fields of stuiy required by the econozy on efficiency grounds may not coincide vith the students' socio-economic back- grounds desirable f o equity purposes .Y Business ~ administration, for instance, mey be a priority area for the economy. F@m the equity viewpoint, it is less desirable aa this field of study is often fields of study according t o the students' socio-econamic backgrounds has Seen prese~:ed i n t h i s paper due t o the small size of the ICETEX sample.  selected by socially privileged students. Although the real world is a world of compromise, especially betveen the two broad criterFa of equity and efficiency, it is neverthelesa important to.be aware of possible conflicts of objectives and, also, t o work out an appropriate order of priorities between them. ( 11) assess in^ the "pre-loans" situation The best conceived student loan schemes may pmve to be a failure if they are operated in an in-.? appropriate context. I n this respect, the Colombian experience gives La number of useful clues. It shows, for instance, that the ability of student loan8 t o become a non-negligible source of univemity revenre depnda on the structure of university finance and, more specifically, on the importance of fees in total revenue. What is ahould be - the - and importance #,feest An e(5r#tSk8id'" ' on this question, clearly, comaad+ futureqsuccess or failure of the scheme. - - Studtat lorn schemes pretend t o alter the supply of educated laanpover by l o v ~ r i ~the l g costs of 8 fev relected fields of study. This goal v i l l be achieved provided that, in the process of selecting a field of study, low costs are an incentive rtrong en- t o overcane personal taster, traditione or parental authority. This m a ~ rnot be the case eraryvhere and needs t o be carefully investigated before launching the loan scheme. In sons countries, loan schemes are advocated t o d.ppen the demand for education. Loans ~ l q y do this i f they replace a eyatern of grants or are ueed for finrncing increaming fees. In both cases, they contribute, in the long run, t o shift the burden of educational costs from taxpayers t o consumers thm- increased prices. The extent t o vhich.the depraad will abate sa a result of t h i s aetion depends p-ly on the preveiling price elasticities of the darnd for education. The performance of a loan scheme vis-a-vis the equity issue is largely conditioned by the degree of wuality of educational opportunity achieved i n the level of education %reeding the level financed by the rcheme. To put it bluntly, student loans contrimto t o "democrcr ze" higher t @ ? a t i o w if r e c o m *?I-+- ' @hati#he. been " d o c r a t iz&dnbefore. Vhanever sow form of educational equity is~contcmplated  as an objective, an overa3.1 assesbmext of the process of social selection going on in the education system is required i n order to select the appropriate level of education vh=i.e the scheme should operate. ( i i i ) Weighing student loans as against other student aid policies The present report has shown that ICETEX loms are subsidized through oelov-the-market interest rates. Such subsidization, which amounts :to aqloining a grant element t o each loan, is current practice all over the world although the extent of the subsidy varies according t o the coutitly under consideration. The mixture of grants and loans leads naturally t o enquire about the ability of other types of student aid t o achieve the objectives assignee? in the present study t o student loans. There is no lack - of experiment vith schemes of outri&% grsntBA,.' tax exemption measures or voucher systems. All ' these schemes may, i f appropriately designed, affect the supply of educated manpover, aiter the social composition of the student body and transfer the burden of educational costs from one group t o another. may even imagine non-financialin- centives -Onesuchas to guarantee a job after gr&uation t o selected groups of students - which vould have pretty much the same effect. As identical objectives may be fulfilled by different student aid policies, the problem o r selecting the most cost-effective one boils davn t o a discussion of their respective ability t o achieve these objectives. Such a discussion can only take place i n reference t o a particular situation at a particular point i n time. Although generalizing can be dangerouslin such a nev area of education, it seems that the future of student loans of the Colonibian type is restrictied t o those types of educc.tion vith high opportunity costs such as univeraty or adult education. Although no experimentshave ever been undertaken t o finance udult education on a larae scale, the characteristics of this type OFeducation - short duration, high opportunity coas, strong expected impact on sub- sequent earnin$, recipients' ability t o provide financial guarantee - appear t o be v e l l adapted to student loan schemes.   Percentage. unler) mpacitied othenire I I I I ?l@~8 not add due to rounding. 1 Source:15 percent rampla of lorn applicatios foru.  Table 3 Volume and Structure o f b a n s t o Students. by &e -!r Perce spec1f i d othemise Unintenaace Books Graduation Coats Age C oup\ d Under 51.8 35.1 36.7 23.6 35.7 7 5L.S : 31.9 : 27-9 23.0 33.2 5 8 . e 36 29.7 - .. 36.7 5'4.9 3'4.3 30.5 2k.3 3b.8 I I ~d d w to r-din(. Source: 15 percent s u p l e of loan ieation fol  Table 4 Vol- .td Structure of Loc.1~to Students, by Year of Study K rear of study (Pesor) - (Peror) (Peror) 71 (Peaor) 1 CI. ntemnce Catr Or. I u t i o q e? m not add dw to rounding.1 15 percent ramplo ot loan applic~tionformr.  Table 5 Volume and Structure of Loans to Students. by Btatua Percentages unless specified otherwise 1 Daytime llight Rill-Time Part-time Total 23.5 6.9 2.0 67.6 100.O i9.9 6.2 1.4 72.6 100.0 - 71 lb.5 6.1 1.5 78.9 100.O 19.1 6.0 1.5 (73.3 ,. IC 100.0 9 ? (Pesos) 5590 4860 9400 5430 5500 1 (?esos) 5650 3590 5920 5180 5190 E (Pesos) 5870 4210 6010 4680 4130 5520 - 23.8 6.1 3.3 . W.8- 21.7 1.3 P.9-' 72.5 100.0 %j-71 11.1 3.7 1.1 80.5 100.o 19.8 1.5 2.0 73.7 100.0 19 46.0 8.3 13.3 54.6 47.3 12.8 48.5 57.0 L8.8 8.3 27.1 53.2 47.3 10.0 27.8 55.0 Tuitio 19691 40.6 81.1 81.5 33.9 1970 38.3 76.2 34.3 29.2 1971 36.3 73.4 52.0 33.7 1969 - 71 38.6 77.2 59.3 31.9 Books 19&3 10.4 8.0 2.3 9.6 1970 11.0 7.5 7 5 10.6 1971 u - 9 7.6 6.3 - I 9.f 1969 - 71 11.0 7-7 4.9 10.1 Gradua1;ion 8 1969 3.0 2.6 2.9 2.0 1970 3.b 3.5 9.8 3.1 - 71 1971 2-9 10.6 11.5 3.2 1969 3.1 5.1 7.9 2.9 t rpy not sdd due to roundlag. 15 -cent .UNC or ban application tom. I  Table 6 Loan Recipientr, by lumber of Amllcatioor I Firrt Second Third Fourth Fifth or Nore Undeclared Total 1969 62.9 19.9 7 1 2.5 2.8 4.8 100.0 w.b 61.7 20.5 7.3 2.3 3.0 5*2 mO.O W e n 68.2 17.1 5.9 4.1 1.8 , 2.9, 100.0 1970 16.4 54.1 14.8 4.8 3.3 6.3 100.0 1 ::: IbSr 16.1 53.4 14.9 590 100.0 u*n 16.7 59.6 13.8 3-6 303 3.3 ,,100.O 1971 12.3 19.8 47.1 10.5 4.8 c - 5.5- s. M 0 . O Nen U.9 20.2 67.2 10.7 5.O 5.0 100.0 w+n 16.1 17.6 66.7 9.5 4.0 8.0 100.0 Soutce: 15 percent rample of loaa application forms.   Tale 8 Voluv m d Structure of bans. by TYPa of Ulrirenitr hvkr of W.inteaurce Orduation w Total Awuut Average h u n t Tuition Boob Borrowed of Iaur Coots ($1 (Pesos) ($1 ($1 1 ($1 1969: ~ u b l i quniver~iti- 62.2 53.1 4,360 6.o 76.b. Uc.2 3.4 Priva* uni~ersities 37.8 46.9 Gwj20 70.2 2Z.k tf5,#.b 1.0 ' t 1970: Publie universitit. 65.3 57.4 4,470 6.5 7b.6 15.1 3.8 Privale urriversities 34.7 112.6 6,230 72.6 19.6 5.5 2.3 1971: u + ,- '> ~ u b l i uuniversities 62.7 56.b 5.2b *& 12.8 1.8' 3.6 Pr;vate uaiversities 31.3 b3.6 6, a 0 73.6 17.9 Lue 2.5 - m: Publin uaiversitiw 63.7 56.0 4,670 7.5 74.3 lb.5 3.7 Rim* universiticl 6 . 3 bb.0 6,140 72.b 19.7 5.9 2.0 Sourcec 15 percent sanple of lour application fornr.  Table 9 Student Loans a d the Financine of Universities 1969 1970 Public Public Private Universities Universities Universities Universities 1. mtil university revenue(a) ( T ~ O U ~Pesos) I X ~ 707,300 2xi.100 : n6,boai'j , ,,.269,400 2. Total revenue o iginating fram tuition fees(af (Thouad Pesos) 39,150 146,000 37,800 187,000 3. Tuition fees aa a proportion of total revenue (2/1 x 100) 5.5 69.5 : I Ir b9 Web - . 4. Number of ICETEX l o w(b) 5,720 3.W .- 6iWAa ' k 3 560 , 5. Average amount of loan (Pesos 4,- 6,320 4,470 6,2W 6. Average amunt of tuitcon finance per 10- (Pesos 260 4,k30 290 4,520 7. Total tuition fees riaanced throllqh ICEPEX loam (6x 4, thousand Pesos) 1,490 15,420 1,930 16,090 8. &an-fineaced tuition fees as a proportion of total re- venue *om tuition fees (7/2 x 100) 3.a 10.6 501 8.6 a 9. ~nsn-iil;sncedtuition ices aa r proportion of total university revenue (?/I x 100) 0.2 7.3 0.2 6.o --- - Source: - (a) See Table 15 in wRefoma d& la Educaci6n Superior, Doou~trtosde 3 Estudio", I-, Julio 1971. 1, 8 (b) Total number of ICgTEX loans: 9,200 in 1969 aad 10,200 in L970. I I 15 percent sample of loan application forms.  - 1969 19'10 1QTl 1969 1911 W l i c h i m t a Pblic h i m t a Public Private r u b 7 -c Rivata Ilniwraitir b i r a r i t i a r tbriwrritiar bivarritin Ilnivarritiar Univarritiar Univarritiar bi+.?aiti~* 1. A- -t of loan b.360 6 . m h.~TO 6,230 5.2hO 6.810 b.610 6.Lb 5 .' 2. AT*aUa ..Punt 0 tudamt L ti-. par l0.llf.f b.lOO 1.m b.1& l.TlU b.130 1,dk '*= 1.190 I ! 3. M a t i d wurc*. or r w * par bar- 4 - - N U balp 1.W 2.9~0 1,bTO 1.910 1.590 2.b20 5 2,220 -uUn 310 1.310 Ooo 2.100 1,330 2.630 2.250 Ocher 3 9 SU) Sjo 600 600 3lD b90 b80 b. hs.l atu&at fil~nea#r borrornr 6.300 6 . ~ 0 6.1b0 6*9!EZv 6 8.250 1.110 t.1~0 5.