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US student loan model a mistake for Mexico?

By Oswaldo Mejía
President Felipe Calderón has announced the Financing Program for College Education, which is intended to provide 2.5 billion pesos in student loans to benefit 23,000 youths who otherwise could not pay for their professional training.

Students will receive 215,000 pesos to finance their university degrees and 280,000 pesos for postgraduate studies. The financing consists of student loans to be paid within 15 years, at a fixed interest rate of 10 percent. Having completed their studies, the professionals will have a period of six months to enter the labor market and begin to repay the loan.

Calderon’s decision has sparked mixed views among specialists, mainly regarding the viability of implementing these processes in the educational system in Mexico. In an exclusive interview for Atención, Ilana Dann Luna, Ph.D. in Hispanic literature at the University of California, Santa Barbara, said, “I think it is not a bad idea to create alternative ways for youth to get an education in the school of their choice. However, one of Mexico’s greatest achievements is its network of low-cost public universities for students, allowing fair use of public funds, distributing the cultural capital in a democratic manner.

“I fear that integrating the American model would open a larger gap between the wealthy and nonwealthy people in Mexico, a serious issue that should not continue increasing.”

When asked about the trend in Mexico to adopt funding models like those in the US, she said, “I think it is just a mistake. In the United States today there is much debate about the crisis of post-secondary education precisely because of the issue of huge debts with which each student (and his entire family) must be burdened, even for an education at a state university.

“In the case of the system at the University of California the voting public has expressed a lack of interest in maintaining state support for the institution.When education for all remains a state matter, and becomes a personal problem, those who suffer most are those who have fewer resources, the least able to pay off the debts, which rapidly accumulate as prices soar due to privatization and free market economics.”

Finally, she spoke about the problems faced by the education system and graduates of US universities who opt for cheap loans for their education.

“One of the main problems of the college-level education system in the US is that education is less valued each day, and at the same time a higher educational level is required just to enter the workforce. That is, in the US, unlike in Mexico, they are starting to require a degree even for a minimum-wage job, but since the cost for this is huge, and a large majority of students need to get loans to meet the exorbitant tuitions, they leave the university with a large debt, which precludes social mobility.

“This creates a formidable obstacle for any young person who wants to start his or her professional career. In Mexico, at least until today, there is the possibility of receiving a top-quality education in public institutions. In the US, that is not possible due to increasing prices and competition among the many private universities. There is no way that a low-income family can send their son or daughter to college without great sacrifice.

“The problem is not only economic but also psychological. Starting life knowing that you have to pay a debt in the next 30 years is emotionally draining. I think that in the US, as well as in Mexico, we must rescue the education of youths and, as a society, give it a higher value, and leave their future profession free of debris and economic interests.”

In December last year, 2.5 million people in Mexico were unemployed, of whom 1.4 million were under 30 years of age. Can the state can generate in parallel with these programs enough jobs to employ the graduates of private universities? Why was such an investment not made in public universities, which year after year suffer a lack of funding?

For now, the student loan program is in place and is an option for thousands of young people who wish to further their education. The consequences and advantages remain to be seen.

More information about this program can be found at

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