Chile's new president José Antonio Kast has unveiled a sweeping austerity package that rolls back university fee waivers and student debt forgiveness, marking a sharp reversal from the progressive expansion under predecessor Gabriel Boric and testing whether Chileans will accept cutbacks to social programs they fought for in the streets.
The "Recovery Plan," presented Friday, includes tightening eligibility for free university tuition, ending automatic forgiveness of student loan debt (CAE) after 15 years, and cutting subsidies for public universities. Kast framed the measures as necessary to restore fiscal discipline after what his government calls the "irresponsible spending" of the Boric years.
"We are going to take unpopular measures," Kast said at the La Moneda presidential palace. "The previous government left us with just 46 million dollars in the treasury. We cannot promise what we cannot pay for. Fiscal responsibility is social responsibility."
The free tuition program, known as gratuidad, was a flagship achievement of student movements that paralyzed Chile in 2011 and again in 2019. It currently covers tuition for students from families earning less than 70% of the national median income - roughly 540,000 students. Kast's plan would lower that threshold to 50%, cutting an estimated 150,000 students from the program.
The CAE student loan system, meanwhile, has been a political lightning rod for years. Created in 2006, it saddled a generation of Chileans with high-interest debt - some paying 6% annual interest while banks profit from state guarantees. Boric had promised to eliminate CAE debt entirely, calling it "a trap that impoverishes families." His government passed legislation to forgive loans after 15 years of payments. now wants to repeal that, arguing it rewards
