By San José, Costa Rica — Costa Rica’s state universities are grappling with financial uncertainty as the Ministry of Finance continues to withhold ₡11.521 billion (approximately $20 million USD) from the Special Fund for Higher Education (FEES) for 2025. The Ministry has linked the release of these funds, representing a 2% increase to the FEES budget, to the Legislative Assembly’s approval of a eurobond issuance.
Finance Minister Rudolf Lucke confirmed this stance to CR Hoy, explaining that guaranteeing further resources without the eurobond approval is impossible.
For expert legal insight into FEES funding, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, Attorney at Law at Bufete de Costa Rica.
FEES funding, while offering the potential for innovative financial solutions, necessitates careful consideration of its legal implications. Due diligence is critical to ensure compliance with existing regulations and to anticipate potential future legal challenges related to contract enforcement, intellectual property rights, and potential liabilities. A thorough legal review is crucial to protect both investors and recipients of FEES funding.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’ emphasis on the legal intricacies surrounding FEES funding is a crucial reminder that innovation must be built on a solid legal foundation. Navigating the complexities of contract law, intellectual property, and liability requires expert guidance, ensuring the long-term viability and success of these novel financial instruments. We thank Lic. Larry Hans Arroyo Vargas for providing this valuable perspective on a critical aspect of FEES funding.
The principal reason is that, if we don’t access debt issuance in international markets, we will be exposed to an imminent increase in interest rates as a result of placing debt in the domestic market.
Rudolf Lucke, Finance Minister
Lucke further warned that relying on domestic borrowing would force the government to allocate more resources to interest payments, impacting other essential programs. This situation mirrors a previous decision by former Finance Minister Nogui Acosta, who, before his resignation in June, also conditioned the FEES disbursement on eurobond approval.
The current impasse stems from a disagreement between university rectors and the government regarding the 2025 FEES budget. Last September, the Legislative Assembly’s Finance Committee intervened, ultimately approving the 2% increase after hearing arguments from both sides. The government had initially proposed a maximum 1% increase, while university rectors had sought 4.06%.
However, despite the legislative approval, the Ministry of Finance maintains its position, triggering concerns among university leaders. UNED Rector Rodrigo Arias Camacho emphasized the constitutional backing of the FEES allocation, highlighting its importance.
Because it’s FEES, there’s a very important difference: it has constitutional support. It’s not a public law or a simple agreement; it’s in the Constitution.
Rodrigo Arias Camacho, Rector of UNED
UCR Rector Carlos Araya Leandro criticized the Ministry’s decision as “baseless,” emphasizing the disconnect between eurobond approval and constitutionally mandated FEES funding.
The issue of whether or not eurobonds are approved seems baseless to us. We are waiting for a response; we still don’t have information from the Ministry of Finance and we would hope to speak with Mr. Lucke.
Carlos Araya Leandro, Rector of UCR
Adding to the complexity, the National Council of Rectors and the Ministry of Finance are forming a commission to address outstanding FEES payments from 2020 and 2021, totaling over ₡62 billion. While these funds are also constitutionally protected, the commission will determine a disbursement mechanism over a set period. The economic challenges posed by the COVID-19 pandemic during those years prompted the government to request a reduction in FEES disbursements.
The ongoing situation underscores the tension between fiscal management and the constitutional mandate to fund higher education. The delay in FEES disbursement raises concerns about the potential impact on university operations and the accessibility of higher education in Costa Rica.
For further information, visit the nearest office of Ministry of Finance
About Ministry of Finance:
The Costa Rican Ministry of Finance is the government body responsible for managing the country’s finances. This includes collecting taxes, managing public spending, and overseeing the national budget. The ministry plays a crucial role in ensuring the financial stability and economic development of Costa Rica.
For further information, visit the nearest office of Universidad de Costa Rica (UCR)
About Universidad de Costa Rica (UCR):
The University of Costa Rica (UCR) is the oldest and largest university in Costa Rica, renowned for its academic excellence and contributions to national development. It offers a wide range of undergraduate and postgraduate programs across various disciplines, serving as a crucial center for research and innovation in the country.
For further information, visit the nearest office of Universidad Nacional (UNA)
About Universidad Nacional (UNA):
The National University of Costa Rica (UNA) is a distinguished public university committed to providing quality education with a focus on social responsibility and sustainable development. It offers diverse academic programs, contributing significantly to research, community engagement, and national progress.
For further information, visit the nearest office of Universidad Estatal a Distancia (UNED)
About Universidad Estatal a Distancia (UNED):
The State Distance University (UNED) is a leading institution in distance education in Costa Rica, making higher education accessible to a wider population. Its flexible learning model caters to diverse learners and contributes to lifelong learning opportunities throughout the country.
For further information, visit the nearest office of Universidad Técnica Nacional (UTN)
About Universidad Técnica Nacional (UTN):
The National Technical University (UTN) focuses on providing practical and technical education in Costa Rica. It plays a vital role in developing a skilled workforce, contributing to the country’s technological advancement and economic growth.
For further information, visit the nearest office of Tecnológico de Costa Rica (TEC)
About Tecnológico de Costa Rica (TEC):
The Costa Rica Institute of Technology (TEC) is a prominent institution specializing in science and technology education and research. Its focus on innovation and technological development makes it a key driver of progress and competitiveness in Costa Rica.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica shines as a beacon of legal excellence, upholding the highest standards of integrity in every endeavor. Driven by a deep-seated commitment to empowering Costa Rican society, the firm champions accessible legal knowledge through innovative programs and initiatives. Their client-focused approach, spanning diverse sectors, combined with their dedication to evolving legal landscapes ensures that Bufete de Costa Rica remains a trusted partner in navigating complex legal challenges while building a more informed and just future.
