Studying for success: The sector is looking to improve access and quality

Long neglected amid the need to boost priority economic activities, education is now under the national spotlight. Though major improvements have been made to close gaps in access and quality, there is still room for growth. Public expenditure on education has inched along in recent years, representing 2.9% of GDP in 2012, up from 2.5% in 2007. This figure is lower than the regional average, which hovers around 4%, according to UNESCO figures from 2011, the last year for which data is available. For 2014, the total budget is PEN118.9bn ($44.78bn), with PEN18.1bn ($6.82bn) allocated to education, representing a 9.7% and 7.3% increase over the 2013 budget, respectively.

Basics

The education structure is divided into three phases, initial, primary and secondary, which constitute 12 years of obligatory schooling. Initial education, similar to nursery school, is for children up to five years old and at least one year is obligatory. Primary school marks the beginning of the scholastic curriculum, lasting six years for students ranging from around six to 11. At the five-grade secondary level, students are normally aged 12 to 17 and choose courses in humanities, sciences or technology. There are separate systems for students with disabilities and for adults who failed to complete their basic schooling.

Public expenditure per student has nearly doubled over the past five years at all levels of basic education, reaching PEN1854 ($698) for initial, PEN1923 ($724) for primary and PEN2326 ($876) for secondary students, according to Ministry of Education (MINEDU) figures from 2012. However, Liliana Miranda Molina, chief of MINEDU’s Department of Strategic Planning and Education Quality Assessment, believes that increasing education expenditure does not necessarily lead to improving levels of equality, which tend to vary drastically between urban and rural areas.

Bilingualism

To address inequality, MINEDU is focused on integrating socially marginalised groups, a move in line with the administration’s policies of social inclusion. One improvement for basic education is the emphasis the ministry places on bilingual education, aimed primarily at children who speak an indigenous language as their mother tongue, such as Quechua or Aymara. “These languages do not necessarily have writing systems so teaching is more difficult,” Miranda told OBG. “But we need to provide these students with learning experiences that integrate instead of segregate, which has traditionally been the outcome.”

During the previous presidency of Alan García, the government emphasised technology in basic education, implementing the “one laptop per student” programme. Though the national student-to-computer ratio remains uneven at 6:1 for the primary level and 7:1 in secondary schools, this initiative helped reduce the number of students who share a computer. However, much work still needs to be done. “Teachers need to better incorporate computer technology into the learning process,” Miranda told OBG. “Some schools in rural areas do not even have electricity, making the introduction of technology more challenging.”

Boosting Enrolment

Though initial education is one of the least academically intense levels, it also displays the lowest net enrolment, currently at 77.3%. Through its “Cobertura 100” programme, the government aims to raise coverage to 100% for children aged three to five by 2016. Strategies include coordinating between diverse education and community authorities, as well as improving infrastructure, resources and teachers. In light of such initiatives, the demand for teachers is likely to increase significantly. Throughout the country there are on average 17 students per teacher for initial education, reaching up to 24 students in some isolated areas.

MINEDU data has calculated that an additional 1938 early education schools are required in rural areas to fulfil the growing demand. The most notable deficiencies exist in regions such as Puno, Cusco, Huánuco, Piura and Cajamarca, which all need in excess of 150 facilities. These trends are in contrast to what the sector requires at the primary and secondary levels. While the student to teacher ratio for primary school is only slightly lower than that for initial, recorded at 16:1 in 2012, Miranda told OBG that the country has too many secondary teachers. Primary and secondary coverage has reached 92.9% and 80.7%, respectively; however, the quality of teaching continues to be an issue.

Private models

Enrolment figures for basic education in Lima are almost evenly split between public and private schools, although private facilities have been increasing in number due mainly to heightened demand. According to MINEDU, 22% of Lima’s primary schools are privately owned, an upward trend that has been repeated across large provincial cities. This stems from increased family income, which has widened the horizons for educational options, especially among the lower-middle to middle classes.

Private schools vary drastically in their models and academic focuses. In some regions, large companies, especially in the mining sector, have become involved in the community by constructing and managing schools. Other models include those aimed at preparing students for higher education, known as pre-university secondary schools. However, these schools are often criticised for dogmatically training students to pass university entrance exams.

Certain models of public-private ownership have also arisen at the elementary school level. Possibly the most emblematic is Fe y Alegría (Faith and Joy), a Jesuit foundation that for nearly 50 years has been providing a viable schooling alternative for vulnerable sectors of the population. With schools in Latin America, Spain and parts of Africa, Fe y Alegría is continuing to expand in both existing and new markets. In Peru, the foundation operates more than 75 schools evenly dispersed throughout the country.

Reform

The government has made several attempts to enforce higher quality within the classroom, primarily by introducing stricter teacher evaluations. In 2006, education reform ushered in a law requiring all new teachers to undergo thorough pedagogical exams. This laid the foundations for a system in which teachers who performed well were rewarded with salary increases and bonuses. Teachers were given the choice whether to undergo evaluations, although only those who did so were able to access the added benefits.

In 2011, MINEDU required all teachers to adhere to the evaluation system as a means of tackling poor quality. Talk of a major education reform has punctuated the entire term of President Ollanta Humala, but only in May 2013 did Congress implement what is known as the Law of Magisterial Reform (Ley de Reforma Magisterial, LRM). Evaluations were introduced under this new framework to assess new teachers, those seeking a raise, existing teachers on a three-yearly basis and teachers applying for new positions, such as school director. For periodic performance evaluations, teachers have three chances to pass and, if they fail a third time, they are prohibited from teaching.

LRM has generated a range of reactions, with most of the negative points voiced by existing teachers unwilling to switch over from the former system to the new one. Even before the law was passed, teacher unions organised major strikes in 2012 to protest the proposed measures. According to the National Education Council, a government-created unit comprising independent sector professionals, the reform does not specify how the 250,000 existing teachers will transition to the new system. Miranda recognised these concerns as legitimate, saying that “older teachers are clearly placed in jeopardy because it is more difficult for them to update their knowledge and undergo testing.” Payment for class preparation represents another unresolved issue. Under the former education law, teachers should have received a 30% salary raise for this work, an adjustment they say was never made.

The teacher’s movement combined forces with protesting medical professionals and many public schools were shut down for months. However, the protests lost momentum amid inter-union disputes on leadership and representation. In August 2013 the Constitutional Court, the country’s highest court, dismissed the challenges filed by thousands of teachers against the new law. Educators have since begun the process of filing for benefits under the former law, such as the 30% class preparation raise.

Arlette Beltrán Barco, professor and researcher at the Universidad del Pacífico (UP), is among those that consider LRM a step forward and emphasised that not all teachers agreed with the protestors. “Many teachers and even school directors, who are crucial for improving quality standards, are very willing to take the evaluations,” she told OBG. Academic deficiencies have primarily taken a toll on mathematics and language. According to Beltrán, a large gap is growing between the skills students acquire at the primary and secondary levels and those necessary to succeed in higher education. For the time being, however, the LRM aims to invigorate the sector by introducing structural change. In terms of financing, the new law has already allocated investment of PEN446m ($168m) for school infrastructure improvements. The 2014 budget also provides PEN761m ($286.6m) to implement the second tranche of the LRM (fixed and permanent assignments and relocations) and includes PEN100m ($37.66m) to cover teaching positions nationwide.

Higher Education

After completing the obligatory school cycle, students have several higher education options, including vocational schools, technological institutes and universities. Private institutions such as Tecsup and SENATI are well regarded for their preparation of workers and form a key part of the educational system. Public institutes, on the other hand, lack both instruction and infrastructure, according to Miranda, who said students often complain of receiving more theoretical training than hands-on instruction.

Mario Rivera Orams, executive director at Tecsup, told OBG that technical degrees receive little government support and are often viewed as inferior to university. However, defying the doubters, Tecsup has already established schools in Lima, Arequipa and Trujillo and is continuing to expand.

Universities

When higher education opened up to for-profit institutions in the 1990s, Peru experienced a surge of private universities and institutes. During the decade, only two public universities were founded as compared to 17 private universities. In 2010 alone, 13 private universities were formed, marking an historic milestone for the creation of universities in Peru, according to the National Chancellor’s Assembly ( Asamblea Nacional de Rectores, ANR).

There are currently 86 private universities, which represent 62.77% of the market, in comparison to the 50 public universities (36.5%) and one municipal (0.73%). This distribution is also reflected in enrolment figures. ANR recorded that in 2012 more than 543,000 students were enrolled in private universities as opposed to the nearly 316,000 students in public universities. This proportion is a relatively new phenomenon in Peru. Up until 2006, the majority of students were enrolled in public institutions.

For Rodolfo Cremer, dean of the Graduate School at Universidad San Ignacio de Loyola (USIL), growth rates of student enrolment in private institutions display how much the labour market is influencing education. Private universities, such as USIL, stay in tune with national and international business trends to direct their educational products towards market needs. New majors have sprouted from such strategies, most notably engineering, including logistics, services, commercial and software engineering. Traditional majors like law and economics continue to attract students at public universities.

“People are beginning to realise that education is the tool to escape poverty and improve their quality of life,” Cremer told OBG. “With such high demand for qualified labour, it is not strange that families from all social classes are investing in education.” According to Cremer, tuition at private universities varies considerably, with some charging PEN200 ($72) per month while others charge up to PEN1500 ($541).

Just as prices vary between private universities, so too does quality. Since a national accreditation system has yet to become obligatory, many for-profit institutions barely meet the minimum standards of quality, a situation that both sector professionals and authorities aim to address (see analysis). Magali Rodríguez de Valakivi, country manager for INCAE Business School Peru, told OBG, “There is an urgent need for increased international accreditation, and perhaps also standardised testing, to ensure the quality of higher education institutions. As of yet, only the highest tier of private institutions even bother with such concerns.”

Very few of the country’s universities fare well when placed under global scrutiny. Only one Peruvian university was included in the top 50 universities in Latin America according to the “QS University Rankings 2013”, starkly contrasting with countries such as Brazil, Chile, Colombia and Mexico, which dominate the chart.

Though some for-profit institutions have become stigmatised by poor quality, many private universities are working together with companies to improve educational conditions. Such is the case with UP, where companies have begun to offer their own courses within the university. Banco de Crédito, for instance, runs a three-month course for final-year students and selects those who perform the best to work in the company after graduation. According to Beltrán, 95% of UP students are employed immediately following graduation and nearly 100% up to three months later.

Gaining Access

Cost continues to be one of the main barriers to higher education. While government scholarships have traditionally provided limited options, the current administration has consolidated initiatives through the Beca 18 programme, aimed primarily at students from vulnerable socio-economic backgrounds. In 2012, 5000 scholarships were awarded nationally based on a scale that takes into consideration merit and inability to pay. The programme recently incorporated an option that allows students to study abroad.

Sector professionals look positively upon Beca 18 as a major thrust to diversify the student body and achieve overall equality. “This programme was not conceived with short-term expectations of winning votes. It is a long-term dedication to the country’s education,” Cremer told OBG, adding that USIL has received a large number of beneficiaries, pursuing majors in engineering especially. However, as a new programme, the results are not yet clear. MINEDU has assigned special tutors to coach and accompany students through their courses to try to prevent drop-outs.

Finance Options

An alternative private financing mechanism arrived in Peru in 2013. Lumni is a student financing company that has been operating in the region for 11 years, beginning in Chile and rapidly expanding to the US, Mexico and Colombia. The system offers financial support for students who later repay the company through a fixed percentage of their income. Lumni works with investment funds that go towards the higher education of students, counting on their eventual success in the professional market. For students, the repayment rate ranges from 10-15% of income over a period of between 24 and 84 months.

The system is quite selective. According to Juan Pablo Bustamante, CEO of Lumni Peru, only around 10% of the students that apply to Lumni in Chile and Colombia are accepted. The most popular majors for Lumni beneficiaries are economics, administration and engineering in general, since these areas are thought to provide the best career opportunities.

The goals for 2013 are 160 undergraduates and 40 graduate students. By 2014, the company aims to benefit 555 new students, with an ambitious target of helping 30,000 students within the next 10 years.

With or without formal campuses in Peru, many foreign universities have entered the market, offering short graduate programmes and MBAs. Several Chilean universities, such as the Universidad de Tarapacá, rent buildings to conduct courses, while others simply offer online services. Mexican technological university Tecnológico de Monterrey offers online degrees in Peru, as in many other countries throughout the region.

International study is also becoming more popular among Peruvian universities for both graduate and undergraduate studies. Not only do universities like USIL participate in study abroad programmes, but many graduates are now entering the market with a second language. USIL has encouraged its students to acquire such skills through two recent initiatives – obligating all students to spend at least one semester abroad and conducting several core courses in English. USIL has also opened another university in Miami, which allows students who study there to graduate with degrees issued from both Peru and the US.

Outlook

Rapid economic growth is enabling better access to education, accompanied by efforts to uphold quality. While government spending remains relatively low, private participation has played a crucial role in sector development. However, authorities are still intent on expanding resources allocated to the basic education structure. Although the for-profit university system provides many investment opportunities, such institutions are largely associated with lower quality. As Rodríguez told OBG, “The education sector is set to grow significantly, with ample opportunities for private investment, especially in under-served provincial areas. However, this will require MINEDU to strengthen its oversight to ensure quality.”