The World Bank has approved a $200 million loan (£125 million) to help the Colombian higher education system.
The money should boost student numbers, especially from poorer social groups, and improve the relevance of Colombia's higher education system to its struggling labour market.
A bank study reveals that students with a tertiary education in Colombia are only marginally better prepared for the workforce than secondary sector graduates, with an unemployment rate of 18 per cent, compared with 20 per cent of school leavers.
The report also stresses the damage caused to universities by 38 years of civil war. "It has brought about intolerance and social disintegration and has, within the universities, led to frequent shutdowns, interruption of classes and a hostile atmosphere that is neither conducive to learning nor to the spread of democratic values," the report says.
A key aim is to help the tertiary sector catch up with the expansion of Colombia's secondary schools, which in 1998 educated 63 per cent of its children, compared with 44 per cent in 1988. Universities remain the preserve of the wealthier Colombians. The rate of secondary students continuing to higher education fell from 55 per cent in 1989 to 37 per cent in 1999.
The Colombian government plans to introduce a broader-based student-loan system, making those from the poorest backgrounds eligible to receive a mix of grants and loans.
Isabel Guerrero, the World Bank's country director for Colombia and Mexico, said: "This project will help economically disadvantaged Colombians gain the knowledge and skills they need to achieve greater prosperity and help curb the flight of better-educated people to other countries."
The bank loan will also be used to improve Colombia's research capacity, and will finance a research centre that will examine the labour market performance of graduates and the quality and relevance of degree courses.