Panel SA: Faculty should have credit risk in Fies linked to student success, says teaching group

One of the great challenges for the new government in education, in the opinion of businessman Daniel Castanho, chairman of Ânima’s board of directors, is updating quality indicators, which should take into account criteria such as innovation in educational institutions and the training of students with an ESG vision, with environmental, social and governance practices.

The resumption of the Fies forecast by the Lula administration should also add new criteria, according to the businessman, such as the greater linkage of educational institutions to the risk of default. “It is possible to create some intelligent metrics for the institution’s co-responsibility, linking its risk to the success of the students. Thus, you will only have a quality institution offering Fies to its students”, he says.

For the future of education, Castanho foresees strong transformations in the business model. “Who knows, in five or ten years, the school tuition model as it is today, will fall to 60% or 70%, at most, of the revenue of an educational institution”, says the businessman.

In view of Lula’s signs that he intends to reissue the Fies, what is, in your opinion, the importance of funding for education?Perhaps Brazil’s biggest problem is productivity. There has been an increase in the number of students in higher education over the last 20 years. But productivity has not necessarily increased. When we talk about student loans, the amount is not unlimited. So, you have to make choices. Who finance? Who is good, by meritocracy, and does not have access to money. And where to study? In good institutions.

It’s not about financing anyone, to take any course and at any institution. The problem with the other Fies was that 98% of the people were eligible. It has to be for those who really need it and for these people to study at the best institutions. And even, who knows, for some specific courses, which are important for society as a whole, because it increases the probability of that person getting a job, paying and being successful in their career.

For a society to be well developed, at least 50% of young people between 18 and 24 years old should be studying. Half of these young people should be funded. I’ll give you an example: The number of vacancies in medicine in Brazil has grown a lot, but in private schools, with an average price of R$8,000. Imagine funding someone from the community who is a good student and who would never be able to pay R$8,000. Being a doctor, this person will be able to pay, even if it is a higher monthly fee. And more: this will return to society and add a lot of value, because it will make a big difference in that community. And it has to be in an institution with a good indicator.

Is the indicator a challenge?One of the great challenges of this government is to create quality indicators that are not obsolete. Of course, the number of master’s degrees, doctorates, how much research that institution does is important. But today the indicators do not consider how innovative the institution is, how technology is improving learning, how much better the student left that university, whether that student graduated with an ESG vision.

Today, the indicator, the IGC [Índice Geral de Cursos] ranges from 1 to 5, most of which are grade 3. Imagine if it were from 1 to 10. It would help to separate the wheat from the chaff. First, it needs to change the evaluation metrics of educational institutions. Then the criteria. It’s no use just training an architect. He must have a vision of social responsibility and try to use recyclable or less polluting products.

Could the Fies financing have had higher interest rates, shorter terms, for example?I think that, as funding, the Fies has to be something subsidized. Not necessarily as subsidized as it was. Not necessarily for the whole audience like it was. And it may have smarter payment mechanisms. In Australia, for example, it is linked to salary. It is x percent of the salary received by the student after he graduates. It may be that he pays in ten years or in three. There may be some that pay in advance and have incentives.

There is a difference between focusing on teaching and focusing on learning. It doesn’t matter what the teacher taught. What matters is what the student learns. Students at an institution could have a lower rate if that institution graduated students who learned more and who paid earlier. It’s like a bank’s credit risk analysis.

As a result, graduating students contribute to incoming students paying a lower fee. In this metric, you link university, professors and students. Everyone is committed to payment, because everyone will benefit.

The educational institution can be a criterion. If you have many defaulters, you can demand a counterpart from the institution. In order for your students to have Fies, you have to cover the risk of default. There, the institution can choose whether or not to offer Fies.

Whose problem are those students who are not good payers? From the institution, which is not training as it should. You can create some smart institution co-responsibility metrics, linking institution risk to student success. Thus, you will only have a quality institution offering Fies to your students. Otherwise, it enters the risk of that financing.

How do you evaluate the debate on the expansion of medicine and how it interferes with Inspirali’s plans, which is your medical teaching arm?I am in favor of expanding courses, because it increases competitiveness, as long as quality is the premise. I believe that medical courses that already have a very high quality could expand their vacancies. What you shouldn’t do is ask to open a medical course simply because everyone is saying it’s a good deal. It goes deeper than that.

In our medical course, the student develops skills. He has to form more holistically. For example, we have a boat in the Amazon where students need to learn about medicine from nature. They serve riverside communities with a school boat, and on the other side, they learn with the midwife. It’s a wonderful exchange.

Quality is the added value for the student to understand what the big trends are and, somehow, to anticipate these trends so that we can train these students for a world that we don’t even know how it will be in five or ten years.

The sector also faces the challenge of a drop in the average ticket for EAD (distance learning). How do you deal with this dilemma?Distance learning, for me, is fashion. I think the future of education is hybrid. If I ask you what percentage of your life is face-to-face and what part is distance, you don’t know. We are finishing this conversation here in person, but later it can become WhatsApp. It’s fluid. This business of separating what is face-to-face from what is distance will cease to exist. The campus will be different. I think there will be a big change.

As for the business model, I think there will be a major transformation. Today, the school’s business model is to sell a course and receive tuition. Remuneration should be based on what the student has learned, for the added value in society.

There are some bold hypotheses that we can think of. For example, imagine a model in which the student only pays half of what he should pay, but after graduation he completes it with 10% of his salary for x years. And the teacher would receive half of his salary, to receive that remainder later. It changes the relationship. Imagine that the teacher was only paid for what the student learned and not for the class he gave. When this logic is reversed, the business model changes.

Now, this could still be something very daring. What I believe will happen now in terms of changing the business model is the entry into the post-employment era. These boys are now going to work on projects. They are going to work on a six-month, two-year project, with a different team, with a person from HR, marketing, technology. And they go to work to solve problems.

If they are going to work that way, the university should also be designed that way. So, imagine a place where students learn from teachers, but companies bring their big challenges, which can range from producing a folder for a bakery to a problem with logistics, inventory, or cash flow. This inseparability between companies, the challenges of society and the university is something that is starting to happen.

Who knows, in five or ten years, the school tuition model as it is today, will fall to 60% or 70%, at most, of the revenue of an educational institution.

Anima Education