VED” %
bs gti 2oie

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Fifieenth Congress
Second Regular Session

COMMITTEE REPORT NO. _ 2201

Submitted by the Committee on Higher and Technical Education on

2 BMAY 2012 :
Re House Bill No, 6219

Recommending its approval in substitution of House Bill No. 1876
Sponsors’ Representatives Juan Edgardo M. Angara & Roman T. Romulo

veGrte

The Committee on Higher and Technica! Education, to which was referred House Bill
No. 1876 introduced by Rep. Roman T. Romulo, entitled

“AN ACT
ESTABLISHING A STUDENT ASSISTANCE PROGRAM BY BANKS AND
GOVERNMENT FINANCIAL INSTITUTIONS.” 6219

has considered the same and recommends that the attached House Bill No. __
entitled

ESTABLISHING A VOLU! LOAN PROGRAM BY BANKS
AND GOVERNMENT FINANCIAL INSTITUTIONS. PROVIDING INCENTIVES,
THEREFOR AND FOR OTHER PURPOSES.

be approved in substitution of House Bill No. 1876 and with | Representatives

Romulo, Juan Edgardo M. Angara, Emil L. Ong, Mariano U. Piamonte, Eulogio
R. Magsaysay, Pedro P. Romualdo, Eduardo R. Gullas, Cesar V. Sarmiento,
Florencio T. Flores, Jr., Raymond Democrito C. Mendoza, Sigftido R. Tinga, Pryde Henry
A. Teves, Isidro T. Ungab, Rufus B. Rodriguez, Roger G. Mercado, Elmer E. Panotes,
Fernando C. Gonzalez, Evelyn P. Mellana and Arnulfo F. Go as authors thereof.

Respectfiuttgpubmitted,

JUAN ED!
Chairman
Committee on Higher & Technical
Education

THE HONORABLE SPEAKER

HOUSE OF REPRESENTATIVES

Quezon City


“Fifteenth Congress
Second Ragular Session

vZ1g
HOUSE BILL NO.
(in substitution of House Bill No. 1876)

Introduced by Representatives Roman T. Romulo, Juan Edgardo M. Angara,
Emil L, Ong, Mariano U. Piamonte, Jr., Eulogio “Amang” R. Magsaysay, Pedro
P. Romualdo, Eduardo R. Gullas, Cesar V. Sarmiento, Florencio T. Flores, Jr.,
Raymond Democrito C. Mendoza, Sigfrido R. Tinga, Pryde Henry A. Teves,
Isidro T. Ungab, Rufus B. Rodriguez, Roger G. Mercado, Elmer E. Panotes,
Fernando C. Gonzalez, Evelyn P. Mellana & Arnulfo F. Go

AN ACT
ESTABLISHING A VOLUNTARY STUDENT LOAN PROGRAM BY BANKS AND
GOVERNMENT FINANCIAL INSTITUTIONS, PROVIDING INCENTIVES
THEREFOR AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. This Act shall be known as the “Voluntary Student Loan
Program Act. 2

SEC. 2. Declaration of Policy. |t shall be a policy objective of the State to assist
eligible students to obtain post-secondary technical-vocational certificates or
diplomas from technical-vocational institutes and college and post-graduate
. degrees from higher education’ institutions by encouraging banks and
government financial institutions to lend money to eligible students to be repaid in
installments after the student graduates or leaves the educational institution.

SEC. 3. Definition of Terms. For purposes of this Act, the following terms shall
mean:

1) CHED —refers to the Commission on Higher Education

2) Higher Education Institution (HEI) - refers to an educational institution that
is legally authorized to offer a program of education leading to the conferment
of adegree

3) TESDA - refers to the Technical Education and Skills Development Authority
as established under Republic Act No. 7796, otherwise known as the TESDA
Law.


4) Technical-Vocational Institute — refers to a technical-vocational (tech-voc)
education and training institution accredited by TESDA which offers any non-
degree program at the post-secondary educational level oriented towards
skills proficiency leading to certificate or diploma in preparation for a particular
occupation or group of middle-level occupations.

5) Lender — refers to a bank or a government financial institution which
Provides foans to student borrowers pursuant to this Act.

6) Student-Borrower ~ refers to an eligible student with a loan under this Act.

7) Eligible Student - refers to a student who meets the admission requirements
of a tech-voc institute or HEI and has been accepted for enrollment in a post-
secondary technical-vocational institute as a non-degree student or in an HEI
as an undergraduate or post-graduate student.

8) Priority Eligible Student — refers to an eligibie 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 or higher education at the time
of the loan application

9) Goverment Financial institutions ~ refer to 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.

10)Higher Education — refers to college and graduate education or training in an
educational program leading to a degree offered in HEIs. It is also known as
Tertiary Education

11)Post-Secondary Education — refers to education and training in non-degree
vocational and technical courses offered in post-secondary technical-
vocational institutions.

SEC. 4. Registration of Student Loan Program under this Act. Banks,
whether goverment or private, and govemment financial institutions participating
in the student loan program may allot a portion of their ioanable funds for loans
to eligible students. Such banks and govemment financial institutions
Participating in the program may be entitled to avail themselves of the incentives
under this Act by the registration of their student loan program with the Bangko
Sentral ng Pilipinas (BSP).

in addition, the BSP shall provide other incentives, which may be non-
Monetary, to banks and government financial institutions participating in the
voluntary student loan program under this Act

SEC. 5. Loan Coverage. - The loan shall cover the cost of the entire program
offered by the HE! or tech-voc institute, including, but net limited to, tujtion and

2


miscellaneous fees: Provided, That adjustments shall be made in case of
increase in tuition and miscellaneous fees. It shall likewise include an amount for
the cost of attendance, covering necessary expenses of the student for books,
food, transportation, board and lodging and a reasonable allowance for-projects

and other school requirements.

SEC. 6. Student-Borrower Number. For proper implementation of this Act and
to better facilitate the collection of the loan, the SSS and the GSIS shall issue,
upon application, an SSS or GSIS number to the student-borower. The number
So issued shall serve as the permanent SSS or GSIS number of the student-
borrower in case of future employment with the private or government sector.

SEC. 7. Qualification Requirements of Student-Borrower. - Any student-
borrower eligible under this Act shail have the following entry requirements:

A. General entry requirements
1) Must be a Filipino citizen;

2) Currently enrolled or intends to enroll or re-enroll in any of the priority
courses to be determined by CHED or TESDA;

3) Has parents or guardians who are Social Security System (SSS) or
Govemment Service Insurance System (GSIS) members or SSS prior

registrants; and
4) Does not currently enjoy any scholarship or study grant.
B. Additional specific entry requirement for priority eligible student

1) Barangay certification that no other immediate family member of the
student is enrolied or has completed a post-secondary education at the
time of the loan application; or

2) Notarized self-certification that no other immediate family member of the
student is enrolled or has completed a post-secondary education at the

time of the loan application
C. Other requirements as may be determined by banks
SEC. 8. Loan Application. - Any eligible student-borrower may file the loan
application with a participating bank or govemment financial institution. A loan
application shall include, among others:

a. The Student SSS or GSIS number,


rel
12
13
14
1s
16
i)
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
a2
43
44
45
46
47

7». The Taxpayer's Identification Number (TIN) in case the student is employed;

¢. The list of expenses which shall include the total tuition fees for the entire
period of attendance to complete the student's course or degree, with a
necessary allowance for any increase that the tech-voc institute or HE! may
rightfully make and the other miscellaneous expenses certified by the educational
institution;

dA reasonable approximation of the cost of attendance of the student in the
chosen HEI or tech-voc institute which shall include, among others, the cost of
books, board, lodging and transportation expenses;

@. A statement of the student-borrower on the preferred employer in the future,
whether with the private or public sector, and

f. All other requirements that the participating bank or government financial
institution may impose for the proper identification of the student

SEC. 9. Loan Disbursement. - Upon approval of the loafi 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 HEI or tech-voc
institute. Any succeeding tranche shall be disbursed on the condition that the
student-borrower completes the term previously enrolled in as certified by the HE!
or tech-voc institute. The tuition and miscellaneous fees payable to the
educational institution shall be disbursed or be made payable directly to the HEI
or tech-voc institute

SEC. 10. Withholding of Second or Subsequent Disbursement. - 4 lender
who 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.

SEC. 11. Interest Rate and Tax Exemption. - For any loan procured under this
Act, lenders shall charge an interest based on the prevailing ninety-one (91)-day
Treasury Bill rate at the time of release of the ioan to be paid by the student-

borrower.

In adgition, such loans shall be exempted from payment of documentary
stamp tax. 5

/ SEC. 12. 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 the interest thereon,
in equal installments or when the borrower so requests, in craduated periodic
installments, payable quarterly, bi-monthly or monthly at the option of the

4


installments, payable quarterly, bi-monthly 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 tech-voc institute or HEI,
and ending eight (8) years after such date, except that such period may begin
earlier than twenty-four (24) months upon the request of the student-borrower

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

¢, Include a provision for preferential employment of the student-borrower upon
graduation.

SEC. 13. Collection. A lender shall file a request with the GSIS or the SSS to
collect the repayment of the loan through its system of salary deduction and
withholding. It may likewise enter into an arrangement with the Philippine
Overseas Employment Administration (POEA) and the Overseas Workers
Welfare Administration to ensure collection from the student borrower seeking
employment abroad

SEC. 14. Program Administration. An inter-agency team composed of the
CHED, TESDA, 8SP, Bankers Association of the Philippines (BAP), Chamber of
Thrift Banks (CTB) and the Rural Bankers Association of the Philippines (RBAP)
shall jointly be responsibie for policy guidance and direction, monitoring and
evaluation of the student assistance program under this Act. The CHED and
TESDA shail chair and co-chair, respectively, the said team

SEC. 15. Implementing Rules and Regulations. The CHED, TESDA,
Department of Finance and the BSP, in consultation with the SSS, GSIS, Bureau
of Internal Revenue, Central Credit Information Corporation, National Bureau of
Investigation (NBI), POEA, the Coordinating Council of Private Educational
Associations (COCOPEA) and the Philippine Association of State Universities
and Colleges (PASUC), shiali promulgate such rules and regulations necessary
for the proper implementation of this Act within ninety (90) days from the
effectivity of this Act

SEC. 16. Separability Clause. if any provision of this Act is declared
unconstitutional or invalid, the other sections or provisions not otherwise affected

shal! continue to be in full force and effect.

SEC. 17. Repealing Clause. Ali laws, executive orders, decrees, instructions,
rules and regulations contrary to or inconsistent with any provision of this Act are
hereby amended, repealed or modified accordingly

SEC. 18. Effectivity Clause. This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.

Approved,


FACT SHEET

Substitute Bill to House Bill 1876

AN ACT ESTABLISHING A VOLUNTARY STUDENT LOAN PROGRAM BY
BANKS AND GOVERNMENT FINANCIAL INSTITUTIONS, PROVIDING
INCENTIVES THEREFOR AND FOR OTHER PURPOSES

Introduced by Reps. Romulo, Angara, Ong, Piamonte, E.
Magsaysay, Romualdo, Gullas, C. Sarmiento, Flores, Jr., R.
Mendoza, Tinga, Teves, Ungab, R. Rodriquez, Mercado, Panotes, F.
Gonzalez, Mellana and A.F. Go

Committee Referral: COMMITTEE ON HIGHER AND TECHNICAL
EDUCATION
Committee Chairperson: JUAN EDGARDO M. ANGARA

Objectives: t

¢ To address the problem of lack 2f access to education due to economic
difficulties

To encourage banks to help the govemment perform its responsibilty of making
education accessible to as many Filipinos as possible through public-private
partnership

© Toensure that each Filipino family will have at least one college graduate

Key Provisions:

© Provides that the student loan shali cover the cost of the entire program offered
by the higher education institution (HEI) or tech-voc institute, including, but not
limited to, tuition and miscellaneous fees and provided that adjustments shall be
Made in case of increase in tuition ard miscellaneous fees

Includes in the loan package an amount for the cost of attendance covering
necessary expenses of the student for books, food, transportation, board and
lodging and a reasonable allowance for projects and other school requirements

¢ Provides that the student-borrower shall pay only the principal of the loan and
the interest rate based on the ninety-one (91) day T-Bill rate at the time of
release of the Ioan to be paid by the student borrower

© Provides that the loans shall be exempted from payment of documentary stamp
tax

© Mandates the Bangko Sentral ng Filpinas to provide other incentives, which
may be non-monetary, to be given to banks and gevemrment financial
institutions participating in the voluntary student loan program


States that a student-borrower shall be given preferential employment after
graduation

Allows repayment of the loan not earlier than twenty-four (24) months after the
student-borrower ceases attending the tech-vec institute or HE! , and ending
eight (8) years after such date, except that such period may begin earlier than
twenty-four (24) months upen the request of the student-borrower

Related Laws:

Republic Act 7722 Higher Education Act of 1994)
RA 7796 (TESDA Charter)
RA 8845 (Expanded GASTPE Law)