The Impact of For-Profit Higher Education on Brazilian Education

Abstract

For-profit private higher education in Brazil emerged in the 1970s through state incentives such as educational credit and tax exemptions. In its most recent configuration, the logic of investment funds that trade on the stock exchange controls the largest institutions. The management of investment funds inserts a new variable into the investment of financial resources. It requires reducing costs to maximize shareholder value, but this means delivering precarious educational quality. Governed by a logic of maximum profit, for-profit private higher education in Brazil produces extremely poor education, with the result that most such institutions focus on simply being diploma factories for more socially destitute students O ensino superior privado com fins lucrativos no Brasil surgiu na década de 1970 por meio de incentivos estatais, tais como crédito educacional e isenção de impostos. Na sua configuração mais recente, a lógica dos fundos de investimento que negociam em bolsa controla as maiores instituições. A gestão de fundos de investimento insere uma nova variável na aplicação dos recursos financeiros. Requer redução de custos para maximizar o valor para o acionista, mas isso significa a entrega de um nível educacional bastante precário. Regido por uma lógica de lucro máximo, o ensino superior privado com fins lucrativos no Brasil gera uma educação extremamente pobre e consequentemente a maioria delas focam somente no fato de se tornarem fábricas de diplomas para alunos dos meios socialmente mais desprovidos.

The Financialization of Health and Education and Inequality in Twenty-first Century Brazil

“…Huber, Gunderson, and Stephens (2020), analyzing data from 15 developed countries, have concluded that an increase in public spending on education reduces income inequality, and da Costa and Gartner (2017) have argued the same for spending on education and health for Brazil from 1995 to 2012. According to Medeiros and Souza (2013), however, the way in which public spending is generally allocated in Brazil does not play a role in reducing inequality because the allocation of public funds is determined by institutions created for the sole purpose of preserving the privileges of a small ruling elite (for more information see Almeida, 2022).…”

“…This study is designed to contribute to a better understanding of the consequences of the apparent paradox described by Lavinas (2017), who writes of a transition between a period that witnessed a rise in public spending on programs that sought to reduce inequality and universalize access to basic services (such as health and education) in Brazil during the twenty-first century and a period of greater financialization with regard to health and education sectors (see Almeida, 2022;Sestelo et al, 2017). One of the most widely used definitions of financialization was coined by Epstein (2005), who defines financialization as the increased role of financial institutions, markets, and actors in the management of domestic and international economies.…”

“…Although some progress was made in reducing inequality in Brazil during the recent PT governments, the rise of Jair Bolsonaro threatened to undo all their achievements with his government's support for financialization of the economy. This process in fact began during the PT period (see, e.g., Almeida, 2022). According to Saad-Filho (2020b: 10, 23), "The PT governments accepted that their industrial, financial, wage, and welfare policies would be bounded by the reproduction of neoliberalism: which limited the potential gains in redistribution, output, and employment."…”

“…At the university level, Almeida (2022) argues that the substantial increase in the number of private institutions of higher education in Brazil, created to generate profits, has, in recent years, followed a pattern that matches the way investment funds operate in the equity market with the goal of maximizing the value of stocks in the short term. This expansion may be responsible for maintaining and increasing inequality in Brazil.…”

“…Although some progress was made in reducing inequality in Brazil during the recent PT governments, the rise of Jair Bolsonaro threatened to undo all their achievements with his government’s support for financialization of the economy. This process in fact began during the PT period (see, e.g., Almeida, 2022). According to Saad-Filho (2020b: 10, 23), “The PT governments accepted that their industrial, financial, wage, and welfare policies would be bounded by the reproduction of neoliberalism: which limited the potential gains in redistribution, output, and employment.” He further states that “despite their achievements, the social policies of the PT governments were bound by neoliberalism and fostered the marketization and financialization of daily life instead of limiting the commodification of social reproduction.” He argues that the PT period encompassed two varieties of neoliberalism, inclusive (2003–2006) and developmentalist (2006–2013), followed by incoherent economic policies continuing to this day, what he calls “authoritarian neoliberalism.”…”