SAO PAULO, July 4 (Reuters) - Brazil’s government could fund student loan subsidies by tapping part of the 30 billion reais ($9.1 billion) earmarked for regional, constitutionally created developments funds, the Valor Econômico newspaper reported on Tuesday, easing a burden on public finances.
The government could add education as one of the activities that could be financed by the so-called FCO, FNE and FNO funds, according to Valor, which cited an unnamed person familiar with the matter. The funds could provide a cheaper source of funding for Fies, as the student loan subsidy program is known, than National Treasury borrowing, Valor reported.
Fies, which was created to help low-income students pay for tuition at nongovernment universities, has suffered cutbacks amid a record budget deficit.
An Education Ministry spokesman said in an email that it will “address the Fies issue shortly,” without elaborating.
Changes to Fies funding sources could be announced as early as this week through the publication of a presidential decree, Valor reported. ($1 = 3.3060 reais) (Reporting by Ana Mano; Editing by Guillermo Parra-Bernal and Jeffrey Benkoe)