Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

415" Congress
First Regular Session

House BillNo.__1876

Introduced by Representative Roman T. Romulo
Lone District of Pasig City

EXPLANATORY NOTE

It is the constitutional mandate of the State to give priority to education in
order to foster patriotism and nationalism, accelerate social progress, and
promote total human liberation and development. The State has the duty to
protect and promote the right of all citizens to quality education at all levels and
ensure universal access to such education.

The private sector particularly banks and government financial institutions
play a vital role in the national growth by providing an environment conducive to
the sustained development of the national economy.

This bill seeks to promote quality education that is accessible for everyone
by encouraging the private sector's participation, particularly banks and
government financial institutions, in establishing a student assistance program
where eligible students are afforded an opportunity to attend vocational or
technical institutions, or institutions of higher education, by making available to
them funds procured through loans, to cover the cost of tuition fees and other
living expenses, payable in installments after graduation.

For these reasons, the passage of this bill is earnestly sought.

Re Po *

ROMAN T. ROMULO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
15" Congress

House Bill No. 1876

Introduced by Representative Roman T. Romulo
Lone District of Pasig City

AN ACT ESTABLISHING A STUDENT ASSISTANCE PROGRAM BY
BANKS AND GOVERNMENT FINANCIAL INSTITUTIONS, AND FOR
OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Title. — This Act shall be known as the “The National Student
Assistance Act of 2010".

SECTION 2. Declaration of Policy Objectives. — It shall be a policy objective of
the State to assist eligible students obtain post-secondary education in vocational
or technical institutions, or institutions of higher education by:

1) encouraging banks and government financial institutions to lend money
to eligible students to be repaid in installments, at least 24 months after
the student graduates or leaves the educational institution; and

2) providing incentives to these institutions in the form of tax credits and
interest rates that are guaranteed to realize a reasonable return on
their investments.

SECTION 3. Definition of Terms. -- The following terms are defined as follows
CHED - shall refer to the Commission on Higher Education

Eligible priority student — shalll refer to an eligible student who is an immediate
member of a family where no other immediate member of such family is enrolled
in or has completed post-secondary education, at the time of the loan application;

Eligible student — shall refer to a student who has been accepted for enrollment
as an undergraduate student at an institution of higher education, or in the case
of a student already attending an institution, one who is in good academic
standing as an undergraduate, or one accepted for enrollment in a post-
secondary vocational or technical institution;

Government financial institutions -- shall refer to those financial institutions in
which the government directly or indirectly owns majority of the capital stock and
which are registered and directly supervised by the Bangko Sentral ng Pilipinas.

GSIS — shall refer to the Government Service Insurance System

Institution of higher education — means an educational institution that (a) admits
as regular students only persons having a certificate of graduation from a an
educational institution providing secondary education, or the recognized
equivalent of such a certificate; (b) is legally authorized to provide a program of
education beyond secondary education; (c ) provides an educational program for
which the institution awards a bachelor's degree or provides not less than a 2-
year program:that is acceptable for full credit toward such a‘degree; and (d) is
accredited by a nationally recognized accrediting agency or association


Lender — shall mean a bank or a government financial institution which provides
loans to student-borrowers pursuant to this Act.

Post-secondary education — may be education and training in non-degree
vocational and technical courses offered in post-secondary vocational and
technical institutions or education in degree courses offered by higher
educational institutions, the completion of which is attested by a school diploma
issued by or with permission of the Technical Education and Skills Development
Authority or the Commission on Higher Education, respectively.

SSS — shall refer to the Social Security System.

State Assistance Council — shall mean the State Assistance Council, created
under Republic Act 6728 as amended by Republic Act 8545.

Student-borrower — shall mean an eligible student with a loan under this Act.

TESDA — shall mean the Technical Education and Skills Development Authority
as established under Republic Act No. 7796, otherwise known as the TESDA
Law.

Vocational or technical institution ~ shall mean a TESDA-accredited institution
which provides an education designed at post-secondary and lower tertiary
levels, officially recognized as non-degree programs aimed at preparing
technicians, and other categories of workers by providing them with a broad
range of general education, theoretical, scientific and technological studies, and
related job skills training. ‘

SECTION 4, Registration of Student Loan Programs under this Act— Banks,
whether government or private and government financial institutions shall allot at
least three percent (3%) of their loanable funds for loans to eligible students.
Such banks and government financial institutions shall be entitled to avail of the
incentives under this Act by registration of their student loan programs with the
State Assistance Council and the Bangko Sentral ng Pilipinas.

SecTION 5. Loan Application - Any eligible student may file his/her loan
application with a participating bank or government financial institution. A loan
application shall include, among others:

a. A Student SSS or GSIS number;

o

A Taxpayer's Identification Number (TIN);

c. A certification from a vocational or technical institution, or an
institution of higher education staling that such student has been
admitted for enrollment at such institution;

d. A list of expenses including the total tuition fees for the entire period of
attendance to complete the student's course or degree, with a
necessary allowance for any increases that the educational institution
may rightfully make and the other miscellaneous expenses certified by
the educational institution;

e. A reasonable approximation of the cost of attendance of the student in
the chosen educational institution which shall include, among others,
the cost of books, board, lodging and transportation expenses; and

f. All other requirements that the participating bank or government
financial institution may impose for the proper identification of the
student. The student shall also state in the application whether he
prefers the private or public sector for future employment.


SECTION 6. Loan Coverage -- The loan shall include the tuition fee and
miscellaneous fees of the educational institution. It shall likewise include an
amount for cost of attendance covering necessary expenses of the student for
books, food, transportation and a reasonable allowance for projects and other
school requirements.

SECTION 7. Loan Disbursement. - Upon approval of the loan application, the
loan shall be disbursed in tranches every semester or trimester, or any other
term of attendance, depending on the academic calendar adopted by the
educational institution. Any succeeding tranche shall be disbursed on the
condition that the student-borrower completes the term previously enrolled in as
certified by the educational institution. The tuition fee and miscellaneous fees
payable to the educational institution may be disbursed or be made payable
directly to the educational institution.

SECTION 8. Withholding of Second or Subsequent Disbursement.—A lender
that receives information that the student-borrower has ceased to be enrolled
before the disbursement of the second or any succeeding installment shall
withhold such disbursement. Any disbursement which is so withheld shall be
credited to the student-borrower’s loan and treated as a pre-payment thereon.

SECTION 9. Interest Rate and Tax Credit. — For any loan procured under this
Act, lenders shall charge an interest based on the prevailing Ninety (90) day
Treasury Bill Rate at the time of the approval of the loan to be paid by the
student-borrower'and an additional interest of three percent (3%) and in the case
of loans to eligible priority students an additional interest of five percent (5%),
which shall not be payable by the student but maybe claimed by the lender as a
tax credit against gross receipts tax. Provided That the additional interest shall
be allowed as a tax credit against gross receipts tax for the same taxable year
that the additional interest is due. Provided, further, That the total amount of the
additional interest and the claimed tax credit shall be subject to proper
documentation and to the provisions of the National Internal Revenue Code, as
amended

SECTION 10. Terms and Conditions of Loans. — Any loan agreement shall —

a. Be evidenced by a note or other written instrument which provides for
repayment of the principal amount of the loan, together with interest
thereon, in equal installments (or, if the borrower so requests, in
graduated periodic installments) payable quarterly, bi-monthly, or
monthly at the option of the student;

b. Include a provision for acceleration of repayment of the whole, or any
part, of such loan, at the option of the student;

c. Repayment of the principal amount of the loan to the lender, together
with the accrued interest thereon, shall be in equal installments (or, if
the student-borrower so requests, in graduated periodic installments)
payable quarterly, bimonthly, or monthly at the option of the student-
borrower, over a period beginning not earlier than twenty four (24)
months after the student-borrower ceases attending the vocational,
technical and higher educational institution, and ending 8 years after
such date, except that such period may begin earlier than twenty four
(24) months upon the request of the student-borrower.

SECTION 11. COLLECTION. A lender may file 2 request with the GSIS or the SSS.
to collect the repayment of the loan through their system of salary deduction and
withholding. They make likewise enter into an arrangement with the Philippine
Qverseas Employment Agency to ensure collection from student-borrowers
seeking employment abroad :


SECTION 12. Program Administration/Implementing Rules and Regulations —
The State Assistance Council shall be responsible for policy guidance and
direction, monitoring and evaluation of the student assistance program under this
Act. Representatives from the TESDA and the CHED shall sit as members of the
State Assistance Council. The State Assistance Council, the Department of
Finance and the Bangko Sentral ng Pilipinas shall formulate the implementing
rules and regulations of this Act in consultation with the SSS, GSIS and the
Bureau of Internal Revenue and shall promulgate such implementing rules and
regulations within ninety (90) days from the effectivity of this Act

SECTION 13, Student Number. For proper implementation of the Act and to
better facilitate the collection of the loan, the SSS or the GSIS shall issue, upon
application, an SSS or GSIS number to the student-borrower. The number so
issued shall serve as the permanent SSS or GSIS number of the student-
borrower.

SECTION 14. Separability clause. -- If any provision of this Act is declared
unconstitutional or otherwise invalid, the validity of the other provisions shall not
be affected thereby.

SECTION 15. Repealing clause. -- All laws, decrees, orders, rules and
Tegulations or parts thereof inconsistent with this Act are hereby repealed or
modified accordingly.

SECTION 16. Effectivity Clause -- This Act shall take effect fifteen (15) days
following the completion of its publication in two (2) newspapers of general
circulation