Since the eighties the World Bank has favored and pursued a neoliberal-style policy for the universities of the "third world". The declared objectives of this policy are: to diversify the types of higher education institutions, to diversify their funding sources, to redefine the functions of the state with regard to higher education and to further quality and equity.  This policy has concurred with a decrease of fiscal expenditure in almost all countries, which has been the result of neoliberal policies at governmental level.  The consequences have been a drastic decrease of state funding for higher education, growth of a private sector, a decrease in quality and the appearance of a two-tier higher education system, one for the students of the higher-earning groups and a low-quality one for those students coming from underprivileged backgrounds. This paper discusses a Chilean government project (MECESUP) where the principles set forth by the World Bank are implemented.  However, the neoliberal model has been imposed to higher education in Chile since 1981, so it is possible to judge it on its merits. Given the fact that the World Bank sets Chile as an example of higher education policy, this experience may be of interest to other Latin American countries.