By FERNANDO NOGUEIRA DA COSTA*

When education ceases to be a right and becomes a financial commodity, 80% of Brazilian university students are held hostage by decisions made on Wall Street, not in classrooms

The private higher education sector in Brazil has undergone a huge process of denationalization in the last two decades, becoming a highly attractive field for foreign investors. In particular, private equity funds private equity, global educational conglomerates and multinational educational services companies have dominated it.

From the 2000s onwards, there was deregulation and encouragement of the entry of private capital, including foreign capital. The sector began to be seen as a service market with high scalability and low need for intensive infrastructure.

IPOs in the education sector were highly profitable for investment funds. They participated in initial rounds of expansion and consolidation (2007–2015), i.e., stock exchanges were used as a valuation strategy

Today, many of the largest private higher education groups in Brazil have foreign shareholding control, either in whole or in part. Notable examples:

Most of the shares of these groups are traded on B3, but the shareholding structure is largely internationalized, with the presence of funds such as BlackRock, Vanguard, JPMorgan, etc.

Brazilian private higher education is attractive to foreign capital, firstly, because of the mass of “consumers” with pent-up demand for a diploma at this level of education.

Brazil has the majority of its young or adult population without a higher education degree. From 25 to 64 years old, only 21,3% of these people had completed higher education, according to the 2023 PNADC. This is above the general average (19,7%) because in the age groups over 45 years old it is below this average and declines every ten years. When considering the recently graduated age group from 25 to 34, it achieves a better result (23,7%), however, it is about half the average of OECD countries. It surpasses only India, Argentina and South Africa.

The market for second degrees, distance learning (EaD) and technical courses is extensive. There is a strong appeal to public student loans (FIES, Prouni) as a mechanism to facilitate consumption.

There is a high structural profitability. The average monthly fee for a distance learning higher education course (EaD) in Brazil is around R$348. This amount is much lower than the average monthly fee for in-person courses of R$1.132.

The business models are based on distance learning platforms with low marginal costs. The courses have a high national scale and few laboratory requirements. The costs are low because they only hire poorly paid hourly teachers. Their mergers and acquisitions generate operational synergies.

Around 80% of higher education students in Brazil are enrolled in private institutions. More than 40% of these students are enrolled in just five large groups, all with a strong presence of foreign capital. Distance learning has surpassed in-person learning since 2020, with drastically lower costs and higher profit margins.

Therefore, the private higher education sector in Brazil is highly profitable and attractive to foreign capital, because it controls a majority of the largest groups. It benefits from stable demand and public student financing policies. It explores scalable business models with strong profitability through distance learning and mergers.

The denationalization in this sector reveals a broader trend of financialization of social services, in which education is no longer treated as a right and becomes a profitable asset in investment portfolios.

Many of these educational companies are listed on the B3 (Brazil) or NASDAQ (USA), allowing a large inflow of foreign capital via the stock market into the publicly traded capital of these family-owned groups. Even in groups with formal Brazilian control, the presence of global funds such as BlackRock, Vanguard, Fidelity, and JPMorgan is common among the largest shareholders.

There are also different models regarding foreign participation. Cogna and YDUQS have strategies based on volume and scale. Afya explores high-profit niches such as medical courses with very high tuition fees. Ânima and Ser Educacional maintain Brazilian control, but accept foreign capital for expansion.

But some multinationals have backed down. Groups such as Laureate and Adtalem have recently made divestments, but this has not reduced the foreign presence, which is now occurring via capital markets and Private Equity Funds.

As for the impacts of denationalization, perhaps the main one is the “financialization of education”: strategic decisions begin to respond to financial return metrics, to the detriment of pedagogical quality. There is now strong pressure for profitability by cutting costs (hourly teachers, standardized teaching materials, mass distance learning) to increase margins.

There is less national control over mass university education, including in areas such as health, law and undergraduate degrees.

In contrast to this fully liberalized regulatory environment, President Lula (PT) signed, on 19/05/25, a decree with new rules for Distance Education in higher education. The rule regulates limits on online activities in higher education, creates a modality of blended courses, lists courses prohibited for Distance Education and reviews limits on remote activities in face-to-face courses.

Distance learning courses in medicine, law, dentistry, nursing and psychology will be banned. Other health courses and undergraduate degrees may only be offered in person or in a blended format.

Of the 9,9 million higher education students in Brazil, 49% (4,9 million) are in distance learning courses, according to data from 2023. Pedagogy, for example, is the career with the most students in the country, totaling 852 thousand enrollments. Of these, 77% are in distance learning.

There will be a two-year period for higher education institutions to adapt to the rules, and students already enrolled will be able to finish their courses as they started. The vast majority of distance learning courses are offered by private institutions: 71,7% in the private sector and only 12,9% in the public sector.

*Fernando Nogueira da Costa He is a full professor at the Institute of Economics at Unicamp. Author, among other books, of Brazil of banks (EDUSP). [https://amzn.to/4dvKtBb]

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