Deputy Castillo Introduces Bill to Curb Abusive CAE Charges and Safeguard Borrowers’ Right to Defense

Original article: Diputada Castillo presenta proyecto para frenar cobros abusivos delCAE y garantizar derecho a defensa de deudores “It cannot be that the State’s primary response is to legally pursue those who were part of a system that failed to guarantee the right to education,” stated the parliamentarian. In response to the initial measures implemented by the Ministry of Finance during President José Antonio Kast’s administration, Deputy Nathalie Castillo announced the introduction of a bill aimed at strengthening due process guarantees in the collection of student loans, particularly the State-Guaranteed Loan (CAE). This initiative arises after the Executive and the General Treasury of the Republic (TGR) promoted a plan for massive and coercive debt collection, justifying it on the grounds of recovering “fiscal assets.

” However, the parliamentarian warns that this policy ignores the precariousness of the labor market and the actual inability to pay of thousands of professionals and technicians in the country. “Educational debt is not a crime. The State’s primary response should not be to pursue legal action against those who were part of a system that failed to secure the right to education,” Deputy Castillo stated.

In this context, the parliamentarian criticized the Ministry of Finance for utilizing the TGR to carry out collections under the rules of the Tax Code, treating civil debts as if they were fiscal obligations. “What we are witnessing is a serious distortion: the State acts as both judge and party, executing seizures without individuals having a real opportunity to defend themselves. This undermines basic guarantees of the rule of law,” she added.

Proposed Legal Amendment The bill proposes to amend Article 18 bis of Law No. 20. 027, which regulates the financing of higher education, incorporating a new clause that establishes clear limits on the State’s actions in collection processes.

Specifically, the proposal mandates the guarantee of an effective prior defense opportunity for borrowers to raise objections, such as debt prescription; demands sufficient judicial intervention, preventing the procedure from being solely in the hands of the administration; and establishes criteria of proportionality and reasonableness in the application of measures such as seizures or withholdings. “The State cannot bypass due process. If it is going to collect, it must do so respecting the same rules as any creditor in a civil trial,” Castillo emphasized.

From the deputy’s office, they warn that the issue is not only about collection but also the structural origins of indebtedness. In many cases, debts originally around $18 million now exceed $40 million due to accumulated interest, while the conditions for debt restructuring require initial payments that are difficult to meet. Additionally, a significant portion of debtors do not have sufficient income, making the collection processes a direct threat to the economic stability of thousands of families.

Hundreds of professionals have reached out to the parliamentarian to inform her of their situation. “Families are being suffocated by measures such as seizures, without considering their reality. This is not only unjust; it is socially irresponsible,” she stated.