Distance learning reform: challenges to expanding access to education in Brazil
Recent regulatory reforms in Brazil concerning Distance Learning Education (EAD) are likely to severely impact the expansion of one of the country’s fastest-growing segments, highlighting the increasing tension between a focus on expanding access and ensuring quality education. Brazil’s Ministry of Education (MEC) suspended the expansion of any new EAD courses in June 2024, arguing that the regulatory framework needed to be reviewed to ensure courses were up to standard and prevent inadequately structured institutions and courses from running.
Since then, we have witnessed a series of proposed changes in how different institutions are supposed to teach their students – for example, attempts to establish which activities must be conducted on-site and which may still be offered via distance learning.
These regulatory changes, if approved, may impact companies’ business models, as more on-site learning requires more physical infrastructure and lowers the potential to scale up the model. It also may become necessary to revisit teaching methodologies in order to maintain student interest and minimize dropout rates. In any case, investors – and companies running Higher Education Institutions (IES) – will likely face challenges in adapting to the new reality of the upcoming reforms. Beyond the regulatory aspects themselves, labor, tax, and technological challenges are also likely, and the changes may spark activity in the M&A market if companies decide against proceeding with this new model.
Although the new rules for EAD are not yet totally clear, they are expected to involve more requirements for on-site attendance, a need for higher education institutions to hire more teachers, increased infrastructure requirements for EAD centers, and quality assessments at the decentralized infrastructures (polos EAD). However, there is no direct evidence that these measures are prone to directly impact course quality. While on-site quality assessments are welcome, adequate oversight from the MEC is not guaranteed, considering there are no additional guidelines in this regard. These reforms, however, imply higher costs and monthly tuition fees, as well as a substantial shift in the competitive dynamics of the market, reducing the reach of such courses and potentially resulting in many players exiting the market
Henrique Silveira
Partner
