Chile's President Sebastian Pinera delivers his annual address at the national congress building in Valparaiso , Chile June 1, 2018. Marcelo Segura/Courtesy of Chilean Presidency/Handout via Reuters

SANTIAGO (Reuters) - Chilean President Sebastian Pinera’s proposal to create a publicly funded program to help reduce the burden of student loans would cost $8 billion in its first four years, according to a Finance Ministry report cited by local daily La Tercera on Sunday.

The report said that Pinera´s proposal, which has yet to be approved by the country´s Congress, would nonetheless reduce costs of the existing loan program, supported by private banks, by 66 percent once fully implemented by 2043, according to La Tercera.

Chile´s Finance Ministry did not immediately respond to requests for comment.

Pinera is seeking to balance the need to tame a burgeoning deficit against the demands of progressive student groups seeking universal access to free higher education.

The new proposal, first announced two weeks ago, will be called Solidarity Financing for Higher Education (SFS).

The loans will have an interest rate of 2 percent annually, to be paid in no more than 180 installments not to exceed 10 percent of a student´s income.