Tertiary Education Finance for Results Project III

Challenge Chile’s efforts to expand tertiary education in the late 1990s and early 2000s yielded successful increases in student enrollment. Chile’s efforts to expand tertiary education while maintaining quality levels were widely recognized. However, key challenges in tertiary education persisted. The OECD/World Bank Review of Tertiary Education (2009[1]) highlighted gaps in quality and relevance. Related challenges included replacing mandatory theoretical content with the skills-based training required by employers, reaching a critical mass of qualified professors to develop and deliver such curricula, and shifting policy to encourage students to seek shorter degree programs with closer connections to employment prospects. Approach Gaps in the quality of tertiary education could be addressed by increasing the percentage of professors with PhDs, making curricula and teaching practices more rigorous and effective, and by raising academic readiness to better ensure the success of new students from the lowest income quintiles. Gaps in the relevance of tertiary education could be addressed by redesigning academic programs to replace theoretical content with the skills-based training required by employers. Despite the acknowledged challenges, many TEIs in Chile lacked sufficient resources to fund initiatives to improve quality and relevance. Furthermore, Chile’s government recognized the need to bolster planning and management capacity at higher educational institutions to ensure that future initiatives could be successfully implemented and maintained.    Two previous MECESUP projects established competitive funds, allocated based on merit and results, to finance improvements at TEIs. The experience gained from those projects guided the design of MECESUP 3, which expanded the performance agreement financing approach. Performance agreements were recognized as beneficial to the government in that they fostered stronger TEIs while reserving the government’s right to choose investments that reflected its goals for tertiary education. The agreements were also beneficial to the TEIs since they could be designed to address shortcomings unique to their institutions.  Performance agreements were competitively awarded to TEIs to implement 60 “Institutional Improvement Plans” in three categories: Teacher Training Improvement, Technical/Professional Training Improvement, and Academic Innovation. Performance agreements were also awarded for 119 “Improvement Plans” that focused on targeted activities to enhance teaching, learning, and management at the educational institutions. Results  The following are the related improvements in the quality and relevance of education at TEIs that implemented performance agreements:Full-time faculty members who hold PhDs increased from 5,109 at the appraisal period of the project in 2011 to 8,332 at the close of the project in 2016. More highly trained teachers boosted the quality of educational instruction for students at TEIs.First-year student retention increased from 68.4% in 2011 to 73.8% in 2016. Increased retention rates resulted in larger numbers of professionals joining the work force and raising their standard of living. The percentage of students pursuing teaching degrees in programs with redesigned curricula increased from 25% in 2015 to 70.5% in 2016. The percentage of students in vocational training programs with redesigned curricula reached 89.4% at the close of the project, up from 50% in 2015. Improved curricula allowed more students to complete their degrees on time, and to graduate with skill sets aligned with labor market needs. Students experienced positive outcomes as a result of the improvements that flowed from the performance agreements. For example, students completing study programs with redesigned curricula graduated more quickly and with more relevant skill sets., which allowed them to start work and earn sooner.  Following is a sampling of performance agreement data that points to this outcome:Credit transfer systems were a component in all redesigned curricula. In 2016, the TEIs that received MECESUP 3 support to refine their curricula reported that 245,788 students had earned credit units based on previous coursework and employment, thus shortening their time to graduation.Pontificia Universidad Católica de Chile redesigned its engineering curricula to eliminate duplication in course material and unnecessary testing, and the percentage of students graduating on time rose from 17.5% to 30% during the three-year implementation period of the performance agreement. Since redesigning its pedagogy curricula, the percentage of students graduating on time rose from 75% to 88%. [1] “Reviews of National Policies for Education: Tertiary Education in Chile”, OECD and The World Bank, 2009.