Crisis or Reform? Higher Education in Milei’s Argentina with Marcelo Rabossi

Alex Usher: Hi everyone. I'm Alex Usher, and this is The World of Higher Education Podcast.
Back in late 2023, a little known libertarian by the name of Javier Milei was elected President of Argentina with a strong mandate to conquer that country's hyperinflation. His strategy for doing so was pretty straightforward: freeze public spending, which would mean a big loss in real terms until inflation came down, and then let the free market do the rest.
That was easier said than done. Milei lacked a majority in Congress and all of the legacy parties had some reason to try and preserve the status quo, but more or less, Milei got his way and the public sector, including public universities, have had to shrink enormously as a result. Falling budgets, cratering salaries, the lot.
But now the opposition is starting to gain strength. Over the northern summer, Congress passed a bill meant to roughly double state spending on public higher education. Last week, predictably Milei vetoed the law. We can probably expect a season of protests and strikes to ensue.
Returning to the show today to discuss all this is Marcelo Rabossi of the Universidad Torcuato Di Tella in Buenos Aires. He joined the podcast 18 months ago at the outset of Milei's term to discuss what the President's agenda was likely to have in store for the higher education sector. Today he's with us to talk about how the system is surviving what amounts to a massive cut in real pesos, and what the next few months look like as tensions mount between the President and the opposition.
Of particular interest, I think, is where we talk about how, despite Milei's affinity to the US hard right, he's avoided Trumpian tactics, like targeted cutbacks through research rescissions and outright institutional extortion.
But enough from me. Let's hear from Marcelo.
Marcelo, when we last spoke in, I think January 2024, Javier Milei was a newly elected president at the head of a new political movement, La Libertad Avanza. He didn't have a majority in Congress. Still doesn't. He was elected on a mandate to stop hyperinflation, but his appeal wasn't just about tighter money, right? He was a libertarian who wanted to shrink the size of government enormously. You know, which is in some ways quite a revolutionary idea in Argentina. Generally speaking, how has his first year and a half in office gone? Is inflation down? Has the size of government shrunk?
Marcelo Rabossi: Well, Javier Milei's presidency promise from the very beginning and even during his presidential campaign, radical changes to literally crash hyperinflation and doing this by reducing government spendings and opening the economy. There is a word that inflation dropped substantially. For example, in December 2023, monthly inflation peaked at 25%.
Alex Usher: Monthly inflation?
Marcelo Rabossi: Monthly inflation, exactly. And now is around 2% for three consecutive uh, months. This is largely credited to Milei's aggressive authority measures, and a very tight monetary um, policy. He significantly cut federal spendings and restore market dynamics.
It's also true that poverty has declined from 54% in early 2024 to 30 uh, 32% in early 2025. On the other hand, we have to say that economic activity has stagnated and retirees have lost the purchasing power of their, of their pensions. So that is the dark side of the, of the economic plan of Milei.
Alex Usher: How has he been able to achieve his agenda without a majority in Congress? Like what's, what's the dynamic there? Does he strike deals with conservative parties or does the presidency give him some ability to rule by decree? How do you, how do you get things done when you're a minority president?
Marcelo Rabossi: That is a great question because it's, I, I guess that is one of the first or the first party in power that has minority in both chambers of Congress. Milei has rest on, as you say, on emergency executive decrees to bypass legislative opposition or blockages and to implement deep reforms. Early on, Milei's strategies deals with uh, strategic deals with conservative parties, particularly the, the party of former President Madrid and, and the Radical Civic Union Party.
And these strategies help him to to pass the Ley de Bases in 2004, that that was a foundational reform to deregulate the economy. However, the strategy had limits. Now it faces growing resistance, even from former allies. Internal division and, and shifting loyalties have made these alliances fragile.
Alex Usher: Yeah.
Marcelo Rabossi: By mid 2025, even some conservative legislators began distancing, from Milei's more extreme measures and aggressive behavior. So I would say that Milei has governed through a mix of uh, executive power, tactical alliances and public pressure, but is losing that that benefits.
Alex Usher: So my understanding is that Milei's approach to reducing expenditure and inflation has been simply to freeze spending on government departments. And you know, I know inflation is lower now than it was two years ago, but it's still reasonably high. And so inflation just erodes the value of the, the spending.
How has this affected higher education? How big has the cut been to higher education in real terms, that is after inflation? And, is higher education different from other social sectors? So, you know, I mean, presumably you'd have the same dynamics with hospitals and other social services. Is higher education being targeted for bigger reductions or no?
Marcelo Rabossi: You're absolutely right on that. Spending freezes across all public areas. You name it, education, health, infrastructure and has been his primary tool to combat the inflation. But as you noted, when inflation remains high, even if it's slowing, frozen budgets imply budget reduction in public appropriation in real terms.
Regarding higher education, I give you some numbers. In 2024, for example, funding for Argentina's public universities fell around 30% in real terms.
Alex Usher: Wow.
Marcelo Rabossi: And by 2025, the projected budget for university is more or less, 35, 36 uh, lower than in 2023 23. That is according to some some analysis and study that I, I have made. For example, faculty members, 80% of higher education spending goes to salaries in Argentina.
Alex Usher: Mm-hmm.
Marcelo Rabossi: Uh, and that dropped around 35%, and also capital expenses for infrastructure literally collapsed. But not only state appropriation to national university, so real decrease. Education overall suffer uh, more than a 30% in real cut between 2023-25. School teachers training, for example, and technology programs are down to 40% and early childhood education infrastructure down to 60%. Scholarship for low-income students also decrease around 40%. I have to I have to say that schools are funded by at the provincial level. So the, the impact of the, of national cuts down didn't have that the, that huge impact that had in university that are finance at the national level. But again, university education as a whole has been one of the hardest hit sectors. So the, the freeze strategy, as I call it, has helped Milei achieve fiscal surpluses and reduce inflation. But it comes at the cost of shrinking real investment in the future of the country.
Alex Usher: So, the president is sometimes seen as, you know, Argentina's Trump. I mean, I think that's sort of his, his international reputation. He certainly has his admirers on the US far right. You know, Elon Musk copied the president with the, the, the routine with the chainsaw and attacking public finances.
And I don't get the sense that Milei is a friend of higher education. You know, he, he rants about woke intellectuals and, and those kinds of things. So you see that kind of right wing lines of sympathy with the American right. But I don't get the sense that he's copied Trump in terms of silencing particular lines of research or picking fights with individual universities. So apart from the financial cuts, which you know, maybe can be defended purely on anti inflationary grounds, what's the relationship been between Milei and the higher education sector?
Marcelo Rabossi: Unlike Trump, Milei hasn't gone after a specific research agendas or individual institutions. You know, Milei hasn't interfered with academic freedom, for example. There has been no restriction on curricula or no advance on gender studies or, or climate research. And no attempt to control university's governance, for example. Uh, he, his, his approach has been more structural, I would say, than punctual to a certain institution. Although the UBA, the University of Buenos Aires, the largest and, and most important of the system has been the main target for Milei, particularly because as, as I say, this is a more visible institution.
I can add that some of these initial ideas that, of replacing direct public university funding with vouchers remain theoretical provocations, I would say, rather than something with a real support and has no chances to be implemented. So while Milei's behavior to our higher education is hostile, I would say, there's nothing close to institutional repression because his obsession is economy to to to control inflation.
Alex Usher: We're gonna take a short break, we'll be right back. And we're back. Okay, so a second ago, I think you had talked about a, a 30% decline in real terms for university support. Maybe, maybe a little bit higher than that if you go 20 end of 25 to end of 23. How does a university deal with a cut of 33%? Like what kind of decisions do universities have to make in order to keep the doors open in conditions of austerity like that? And what have been the consequences of those decisions?
Marcelo Rabossi: First universities reacted in order to survive, no? So I would say they are operating uh, in a survival mode.
Alex Usher: Mm-hmm.
Marcelo Rabossi: Now in and in this scenario, a university have had to freeze salaries, delay infrastructure repairs, and cut back on research funding. So they were forced to adapt themselves to this new reality by, for example, shortened semesters, reduce course offering and postponed new programs.
Some campuses also have merged departments. Or cut non-essential services as it's happening now in the UBA.
Alex Usher: Yeah.
Marcelo Rabossi: So to give you an idea in monetary terms and why this fiscal restrictive policy has hardly impacting national universities, it's fundamental to know that between 80 to 90% of their total income are national governed funds.
They receive that fund from national government. So remember, Argentina undergraduate education charge no tuition fees. And undergrad student represent more than 90% of a total student body of more than 2 million uh, students enrolled in national institution. On the other hand, historically public universities in Argentina do not have the tradition of fundraising uh, although some university have begun to move into that direction. Yeah, to collect some private money from private donors.
Alex Usher: And surely that gives you know, those kinds of cutbacks would make private universities in Argentina more attractive, right? So Argentina doesn't have a huge private sector. It's not like Chile or, or Brazil. I think it's about 80% of students are in the public system. But have private universities seen an opportunity here? Are they taking advantage of these cuts to sort of tout, you know, the, the benefits of paying tuition and, and offering something more complete than the public sector?
Marcelo Rabossi: Well, as you say, Argentina is, as I always say, is the, the, the private sector is, is more tolerated than stimulated as the case in, in Brazil and, and Chile. So, nowadays there are uh, around 60 private universities in the, in the whole country with around 400 thousand undergrad students. And I would say that historically they have largely avoided the political confrontations. They're neutral in general. Uh, the place to, to play politics is the public sector mainly. So unlike the national institution, they haven't been cast as ideological enemies or targets for Milei. This has allowed them to operate with less social or political confrontation.
On the financial side, I would say that the private sector largely depends on tuition fees. On average, 90% of their income comes from from that source, so decreased public fund has not been an issue for them. Given that there are neither public uh, loans, nor scholarship from from private institutions.
But lately, lately, and this is a novelty, there has been a rumor about scholarship, public scholarship for private universities.
Alex Usher: Okay.
Marcelo Rabossi: But I would say that financially speaking, they are in a reasonably good shape. This and this has allowed them to maintain operation, salaries and infrastructure. In a way they look relatively resilient. But you are also right, with public universities cutting programs, freezing salaries and facing potential strikes, private universities now appear as more stable entities, and predictable for students and families. For those who can afford tuition, maybe private institution may now seem like, a real option.
Alex Usher: Right. Well, and the public universities obviously have been fighting back you know, over the past year and a half. I mean, there have been I, I've lost count of the number of strikes or protests or, you know, public opposition. And what's interesting is that just uh, these past few months during the northern hemisphere summer, your winter, Congress considered a bill to stabilize university finances. And if I understand correctly they, they mandated a floor on funding equal to a certain percentage GDP. That law passed about a month ago. What was this bill and how did it pass?
Marcelo Rabossi: Uh, the goal of of this law, uh, the goal was to increase Argentina University budget from around 0.4% of GDP to 1.5 GDP in the next five years. So that's a lot. Beginning next year, 2026 with 1% of GDP. Historically, spendings or public spending or public appropriation to the public sector was around 0.6, up to a peak of 1%, but in general 0.8 I, I would say. But uh, the proposal is intended yes, to replace the funding law voted by the government in 2024. The bill was introduced in Congress by the, by rectors of the 55 56 national universities with the support of course of unions and student organizations.
This university law proposes updating the budget allocations for accumulated inflation for 2023, 2024 period, and reinforcing faculty salaries starting in December 2023, with monthly updates based on the consumer price index.
Alex Usher: So, but let's talk about what happens politically here. So the, both houses of Congress, I guess, passed the law and Milei has vetoed it on September 10th, I think.
Marcelo Rabossi: Uhhuh.
Alex Usher: How does this get resolved at this point? Is there a, what happens politically to the bill from here on in?
Marcelo Rabossi: You are, you are right about the veto. Uh, is his political tool, no? Given that he has no uh, majority in, in both chambers. University unions, students and education advocates have already uh, state, as I say, protests, strike demonstrations, and more demonstration are expected, especially around congress.
Uh, the veto will increase and escalate tensions as I, as I say, between Milei and the education sector, and it's becoming a rally point for, for the opposition. In short the next weeks will be critical in, in my, point of view. If Congress can't override the veto, university will remain under severe financial strain, and the political pressure on Milei will intensify.
So either way, this is more than a budget fight. The opposition say it's a battle over the future of the public education in Argentina.
Alex Usher: So President Milei has another two years and three months to go, I guess, in his, in his mandate. What's your best guess about how higher education is gonna fare between now and then? What does the Argentinian system look like at the end of 2027?
Marcelo Rabossi: Yep. You are right. We have two, two years ahead. It's difficult to predict the future in Argentina, although some would say expect a new crisis and you'll be right. Uh, As we have said despite lacking congressional majority, Milei push through major reform via executive decrees. That was his political tool.
His confrontational style has kept him in the, in the spotlight, but also sparked resistance from traditional parties, far left conservatives and even moderate liberals. Whether this incipient economic stabilization will translate into long-term growth and as a consequence, certain political support unless social pressure, remains the big question.
If he wins in the next legislative election this coming October, probably he will maintain his firm stance continuing vetoing, and I don't see any major uh, major changes. If the economy grows, there will certainly be some money to calm the situation down, but not enough to achieve what the veto law proposes, which is to double in relative terms, funding for national universities in the short or medium. I think that's a kind of utopia, even if the country managed to emerge from its economic depression. But if, if he loses by a wide margin, the pressure will be enormous turning into a kind of vicious circle that will prevent the country from easily escaping from its economic stagnation.
Keep in mind that the only way for university to receive more funding is for the country to grow. And if conflict increases, investor will postpone their investment decisions, and in such scenario, that will be no winners. But again public in, university, in Argentina, more than just educational institution, they are symbol of social mobility and national pride, and Milei's veto of a bill that would have increased university funding and staff salaries will trigger widespread outrage that will united students, faculty, unions, and even the political oppositions. In fact, new public demonstrations are now underway for this coming weeks, months, or maybe this coming uh, two years after he his mandate finished.
Alex Usher: Lots to keep an eye on. Marcelo Rabossi, thank you so much for being with us today.
Marcelo Rabossi: That's my pleasure. Thank you so much.
Alex Usher: And it just remains for me to thank our excellent producers, Samantha Pufek and Tiffany MacLennan, and you, our listeners and readers for joining us once again. If you have any questions or comments about today's episode or if you have any suggestions for future ones, please do not hesitate to write us at podcast@higheredstrategy.com. Join us next week when our guest will be Yale University's Zach Bleemer, he's a professor of economics there, and he's just co-written a fantastic new paper called Changes in the College Mobility Pipeline since 1900. And we'll be talking about some of that report's surprising findings.
Bye for now.