"We listened, we heard the students. We are much closer than it looks," said Education Minister Felipe Bulnes in a speech.

The proposal, which is the third offer from the government, would extend grants and loans to 60 percent of the most vulnerable students, up from 40 percent.

The new conditions would also decrease the average interest rates on loans from 5.3 percent to 2 percent.

Bulnes said the government will present a draft amendment to parliament that would require that "a quality education be guaranteed in the Constitution," though he did not specify that idea further.

On Thursday a national day of student demonstrations is expected. It will include students and teachers and is part of the ongoing mass efforts that have mobilized thousands of young people to take to the streets in marches and protests.

In almost three months of demonstrations, nearly 1,900 protestors have been arrested and around 260 policemen and 36 civilians have been injured.

More than 200,000 students are not in class, and major universities have been paralyzed.

A free public education system for all has been the main demand of protesters who have taken to the streets in a series of mass demonstrations since President Sebastian Pinera announced plan to cut spending on education.

Copyright AFP (Agence France-Presse), 2011