Rider on methanol bill makes scholarship program permanent – Valor International

28/10/2025 16h00 Atualizado 28/10/2025
In the bill that moved into place certain spending controls from the now-defunct Financial Transactions Tax (IOF) provisional decree, the government secured a provision to make permanent Pé-de-Meia, a program launched under President Lula’s third term that provides financial aid (in effect a scholarship) to public high school students enrolled in CadÚnico, a social benefits registrar. The change was introduced by the bill’s rapporteur, Congressman Kiko Celeguim (Workers’ Party, PT, São Paulo), in response to a government request.
In his report, Mr. Celeguim removed the R$ 20 billion cap established in the law that originally created Pé-de-Meia. Valor has learned that the government asked for the cap’s removal because, if maintained, the program would have had to be discontinued in 2027.
This risk arises because this year’s budget already allocates between R$1 billion and R$2 billion to the program. In 2026, the budget proposal reserves an additional R$12 billion, bringing the total close to the R$20 billion ceiling when added together. In that scenario, many technical analysts believe the law would have barred the full continuation of Pé-de-Meia in 2027.
“To begin with, we amend the statute governing the program that encourages retention in high school, clarifying that the financial incentive in the form of a savings benefit under Law 14818 of 2024 is now paid as a scholarship. Furthermore, we modify Article 7 of the law to permit the program’s perpetuation,” Mr. Celeguim wrote in his report, filed on the evening of Friday (24).
The government estimates annual expenditure on the program to be about R$12 billion. In 2024, the program operated outside the formal budget. This year, only a part is being funded within the budget, after a decision by the Federal Court of Accounts (TCU).
President Lula has already publicly expressed his desire to expand Pé-de-Meia to all public high school students, which would add another R$5 billion to annual outlays beyond the current R$12 billion. A government official denied that removing the ceiling was directly intended to realize that expansion, though he acknowledged that it allows for future budget growth of the program—something not possible under present annual spending limits.
“[With the cap], the government would be constrained from making additional contributions, because the program was not initially envisioned to last with escalating costs,” said Tiago Sbardelotto, a public-finance economist at XP Investimentos. “Removing the R$20 billion cap is precisely about allowing the government to continue funding, make the program permanent, and eventually expand it, should it wish to universalize it.”
When launched in 2024, Pé-de-Meia only served public high school students already enrolled in Bolsa Família. It was later broadened to students from families registered in CadÚnico, doubling the program’s annual cost from R$6 billion to R$12 billion, currently reaching roughly 4 million young people.
Mr. Lula’s aim is to extend the program to 6 million students. “We have 6 million students in high school that should be reached by the program. We’ll need to sit down with [Finance Minister] Haddad and [Education Minister] Camilo [Santana], because in the same classroom, some get Pé-de-Meia and some don’t. Sometimes the difference is cents. So we need to approve universalization so everyone has the right to study,” the president argued at an event on October 18.
Under the original text of provisional decree 1303—proposed by the government as an alternative funding mechanism in place of IOF—Pé-de-Meia was only included indirectly via the education spending floor, which government analysts believe could open up R$8 billion in fiscal space for 2026 (in real terms). Critics, however, warn that this fiscal room might be diverted to other expenses, meaning the projected savings might not materialize.
Mr. Celeguim’s text also retains Pé-de-Meia’s inclusion under the education floor, though indirectly. He stipulates that the educational financial incentive “constitutes a scholarship,” which, according to government technical staff, qualifies it as an expense counted toward the education spending floor.
This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.
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