For-Profit Institutions Enroll 35% of College Students in Brazil!

Dear Commons Community,

The for-profit industry is making steep inroads in higher education in Brazil.    Over the last five years, mergers and acquisitions have made some of the biggest chains bigger, concentrating power in giant for-profit groups. The 10 largest chains of colleges in Brazil now educate nearly 35 percent of the country’s students. As reported in the New York Times:

“Although for-profit colleges have faced scrutiny in the United States, the industry is finding a warm welcome here as the government tries to meet the demand for affordable higher education.

From 2002 to 2012, the number of students attending college in Brazil doubled to seven million. Still, with only 17 percent of Brazilians aged 18 to 24 in college, there is a gap that needs to be served. The government has pledged to raise that percentage to 33 percent by 2020.

To serve that lucrative and growing market, American and Brazilian private equity funds, corporations and investment banks are buying and merging educational institutions at a rapid pace.

Education experts caution that the emphasis on the business aspect of education does not always put students first. Despite such concerns, the for-profit system has proved appealing for a government with limited resources…

Private sector investment in technical, primary and high school education in Brazil is growing. The British firm Pearson last December bought Multi, a chain of foreign-language schools, in a deal worth more than $880 million in cash and debt assumption. Avenues, a New York private school whose investors include the private equity firms Liberty Partners and LLR Partners, has announced plans to open campuses in São Paulo and Rio de Janeiro…

The International Finance Corporation, a branch of the World Bank that invests in projects that reduce poverty and encourage development, is also backing the industry. The I.F.C. is invested in Laureate and several other for-profit college chains in Brazil.

Patrick Leahy, an I.F.C. senior manager for Latin America, said that even if these chains did not always offer the most prestigious degrees, they did give students skills and qualifications at an affordable price that permits them to move up the employment ladder. College graduates in Brazil earn on average 2.6 times as much as high school graduates.

“The system is not perfect, but it is unquestionably a success,” Mr. Leahy said.

This scenario is playing itself out in a number of other countries. In my visit last month to South Africa, the exact same situation was evolving with for-profit colleges expanding and growing in enrollments. The International Finance Corporation was again an important catalyst.  Many countries have little choice mainly because they lack the resources to make major expansions of their public higher education systems.



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