Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

Second Regular Session
SIXTEENTH CONGRESS

HOUSE BILL No__5526 oe

Introduced by: REPRESENTATIVE EMI G. CALIXTO-RUBIANO.

Explanatory Note

This bill seeks to create a National Student Loan Board that will implement a
National Student Loan Program for the poor, defining the functions and powers of the
Board and appropriating funds thereof.

The significance of access to higher learning and education for the unfortunate
and the underprivileged poor cannot be subject to debate. Statistics show that for those
who are in college age population, less than 50% are enrolled in tertiary educational
institutions and approximately 70% are living below the poverty line.

The University of the Philippines (UP System) has implemented a cross-subsidy
program that will be simulated and replicated under this proposal. This particular
measure will mandate a monthly contribution by persons of a specific income bracket
and said contributions will be remitted to the national student loan fund. Thereafter the
funds generated from the collections will be graduated in accordance to income bracket.

Unquestionably, the need to provide for this national student loan program will
assist the deprived and poor by providing them access to tertiary education.

This is a re-filed measure from the 15" Congress with status (pending with the
Committee on Higher and Technical Education — under deliberation).

In view of the foregoing, the passage of this measure is earnestly requested

teh. ii
Emi CACIXTO-RUBIANO

Representative
Lone District of Pasay City


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

Sixteenth Congress
Second Regular Session

HOUSE BILLNO,__9926

Introduced by: REPRESENTATIVE EMI G. CALIXTO-RUBIANO

AN ACT CREATING A NATIONAL STUDENT LOAN BOARD TO IMPLEMENT A.
NATIONAL STUDENT LOAN PROGRAM FOR THE POOR, DEFINING ITS POWERS
AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR

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

SECTION 1. Short Title.
Loan Program for the Poor Act”.

— This Act shall be known as the “National Student

SEC. 2. Creation - There shall be created, under the Office of the President of
the Philippines, in close coordination with the Department of Education (DepEd) and the
Department of Social Welfare and Development (DSWD), a National Student Loan
Board to implement a National Student Loan Program for the Poor.

SEC. 3. Definition of Terms. - For the purpose of this Act, the following terms
shall have the corresponding meaning:

a) Iskolar ng Bayan — hereinafter called ‘Iskolar” shall refer to a qualified
beneficiary who draws from the National Student Loan Fund to support his or
her tertiary education;

b) National Student Loan Fund — hereinafter called the “Fund” shalll refer to a
cross-subsidy benefit fund to be collected by the National Government and
lent to qualified /skolars as hereinafter defined;


c) National Student Loan Board — hereinafter called the “Student Loan Board”

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shall refer to a governing body under the Office of the President tasked to
implement the provisions of this Act;

Board of Directors — hereinafter called the “Board” shall refer to the governing
body of the Student Loan Board and shall the powers and duties hereinafter
defined;

Monthly Contributions — hereinafter called “contributions” shall refer to the
contributions of designated income earners to the Funds, based on the
National Economic Development Administration (NEDA) income brackets;
Iskolar Brackets — hereinafter called “brackets” shall refer to a beneficiary
classification system wherein /skolar ng Bayan shall be ranked according to
the annual family income and/or academic performance in an immediately
previous school term.

SEC. 4, Composition of Board, - The National Student Loan Board created
under this Act shall be composed of the following members.

1) Chairperson — The Secretary of the Department of Education (DepEd), or

2

3)

his/her duly designated representative who should be an Undersecretary,
shall be the Chairperson of the National Student Loan Board. The Secretary
of the DepEd shall receive per diems to be paid for attendance in meetings
called by the Board.

Vice Chairman — The Secretary of the Department of Social Welfare and
Development (DSWD), or his/her duly designated representative who should
be an Undersecretary, shall be the Vice Chairman of the Loan Board. The
Secretary of the DSWD shall also receive per diems to be paid for attendance
in meetings called by the Board.

Executive Director of the Student Loan Board — There shall be an Executive
Director of the Student Loan Board to be appointed by the Chairman of the
Student Loan Board in consultation with the Vice Chairman. The Executive
Director must be a natural-born citizen of the country, and must have passed
the Career Executive Service Officers (CESO) examination. He / She shall


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receive a monthly compensation equivalent to salary grade 28 and shall serve
a term of three (3) years with re-appointment for another term

Working Board Members — There shall be ten (10) Working Board Members,
eight (8) members of whom shall come from the State Universities and
Colleges, and two (2) from the private sector, all of whom shall be appointed
by the Chairman of the Student Loan Board in consultation with the Vice
Chairman, Each Working Board Member shall receive a monthly
compensation equivalent to salary grade 26 and shall have the organizational
designation of “Managing Director’ of a specific functional area of the Student
Loan Board. The term of the Working Board members shall be co-terminus
with the term of the Executive Director.

Ex-Officio Board Members — The Chairpersons of the Government Insurance
Service System (GSIS), the Social Security System (SSS), the Philippine
Overseas Employment Agency (POEA) and the Executive Director of the
Student Loan Board shall be the ex-officio members of the Board. They shall
receive per diems to be paid for attendance in meetings called by the Board.

SEC.5. Powers and Functions of the National Student Loan Board. — The
powers and functions of the Board shall be as follows:

b)

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d)

e)

To closely coordinate with NEDA in determining the income brackets and
monthly contributions to the Fund;

To promulgate the necessary guidelines, rules or regulations for the lending of
funds for education to the poor;

To appoint necessary staff and/or employees of the National Student Loan
Board;

To allocate and disburse funds for the tertiary education of the poor;

To cancel, suspend, or revoke loans in cases of fraud, deception, cheating of
any kind on the part of the borrower;

To be the trustees for the Investment Portfolio of the Fund, which shall be

created out of its excess over semestral operating and lending requirements;


8) To appoint an investment manager for the investment Portfolio, should it be
deemed necessary: Provided, That such appointment should not exceed
three (3) years, and subject to performance review prior to renewal;

h) To report to the Office of the President on a monthly basis; and

i) To perform such other powers and functions as may be deemed necessary by
the president of the Philippines, pursuant to the provisions of this Act.

SEC. 6. Meetings of the Board. — The National Student Loan Bard shall hold
twelve (12) regular board meetings every year to be held every first Tuesday of the
month. The Chairperson of the Board shall be the Presiding Officer and in case of his /
her absence, the Vice Chair shall automatically preside and take over the proceedings..

SEC. 7. Quorum for National Student Loan Board Meetings. — All meetings
shall only be convened with a quorum of at least fifty percentum (50%) plus one (1) of
the regular Board Members. All meetings convened without quorum shall be deemed
null and void, and transactions or rulings made therein shall have no effect.

SEC. 8. Executive Committee of the Loan Board. — There shall be created an
Executive Committee of the National Student Loan Board composed of the Executive
Director and the ten (10) Working Board Members.

The Executive Committee, headed by the Executive Director shall have the
following powers and functions:

To recommend the approval of loan applications by the Board;

b) To review, evaluate and assess programs, plans of action and/or agenda of
the Board;

To review, evaluate and assess the academic standing of loan borrowers;

To implement the orders, rules, regulations and guidelines passed by the
Board;

To conduct annual spot and random inspections on borrowers

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e

To conduct studies and researches for the improvement of educational

services for the poor;


To reprimand, suspend or dismiss erring officials and employees of the
Student Loan Board in accordance with existing rules and regulations of the

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Civil Service Commission;
h)

To appoint the necessary staff and/or employees of the Executive Committee
of the National Student Loan Board;
i) To recommend the cancellation or revocation of loans; and

j) To perform such other functions as may be determined by the Board.

SEC. 9. Student Loan Board Staff / Employees. — The National Student Loan
Board shall determine the number of staff / employees needed to carry out the functions
of the Student Loan Board, subject to the rules and regulations of the Civil Service Law
and rules. The Commission shall likewise provide for the qualifications and
compensation of applicants based on the existing rules and regulations on the hiring of
civil servants.

SEC. 10. Planning Model. — For purposes of developing the relevant
implementing details of the National Loan Program, the Board shall use as a principal
reference the Socialized Tuition Fee Assistance Program (STFAP) currently being
implemented by the whole UP System (University of the Philippines).

SEC. 11. Contributions. — All monthly contributions made to the Fund shall be
deposited by the Board in the Development Bank of the Philippines (DBP) under the
name of the National Student Loan Fund.

SEC. 12. Investment Portfolio. - Funds in excess of the annual operating
requirements of the Student Loan Board not covered by its allocation under the General
Appropriations Act shall be transferred to an Investment Portfolio Fund. The interest to
be derived out of the investment Portfolio shall be used to fund full scholarships for
qualified /skolars in academic institutions of their choice: Provided, That such
educational institutions are duly accredited by the DECS and are included in a list of
qualified tertiary educational institutions prepared by the Board for this purpose.


SEC. 13. Contributor Income Bracket. — The Director-General of the National
Economic and Development Authority (NEDA) is hereby directed to assist the Student
Loan Board in determining the income brackets of wage earners who shall be required
to make contributions to the Fund within ninety (90) days after the effectivity of this Act.
The contribution structure shall be progressive, from a minimum of %% of individual
income bracket to a maximum of 4% of individual income bracket.

SEC. 14. Beneficiary Loan Amount. — The loan available to an /skolar shall be
semestral, and shall be subject to the following terms and conditions.

Availability — Iskolar ng Bayan loans shall be available only for undergraduate
degree courses. This program shall not cover postgraduate courses.

b) Loan size ~ loan amount shall be equivalent to the prevailing cost per
academic unit at the University of the Philippines multiplied by twenty one
(21) academic units

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Loan repayment — loans shall carry an annual interest rate 5% payable over
five (5) years commencing the first year after the graduation of the Iskolar.
Loan amortization computation shall use the Straight-Line Method.
Amortizations shall be deductible from salary in the case of employed
graduate Iskolar or paid directly to the Fund in the case of self-employed
graduate /skolars.

d

Application — the loan shall be applicable to the school of choice of the
Iskolar, to cover tuition and living allowance. Amounts in excess of the loan
needed to cover the /skolar's needs shall have to be derived from other
sources.

Drawdown — Upon approval of a loan, an amount equivalent to the tuition of
the Iskolar can be immediately drawn upon presentation of proof of
registration, Balance can be drawn in five (5) equal monthly instalments
starting the first month of the semester in the case of schools using the
semestral system, or four (4) equal monthly instalments starting the first
month of the trimester in the case of schools using the trimestral system.


SEC, 15. Mandatory Contributions. — All income earners as determined under
Section 13 above are hereby required to contribute to the Fund. Such mandatory
contribution shall be based on NEDA income brackets.

SEC. 16. Loan Repayments. — The Chairpersons of the Government Service
Insurance System (GSIS), the Social Security System (SSS), the Civil Service
Commission (CSC), the Department of Labor and Employment (DOLE) and the
Philippine Overseas Employment Agency (POEA) are hereby directed to closely
coordinate with the Board to determine the present occupational status of borrowers for
purposes of loan repayments to the fund

SEC. 17. Tax Deductibility. — All contributions made to the Fund shall be
deductible from taxable personal income. All loan repayments of graduate beneficiaries
shall likewise be deductible from taxable personal income.

SEC. 18. Appropriations. - The amount necessary for the effective
implementation of this Act shall be taken out of the funds appropriated for the Office of
the President. Thereafter, such amount as may be necessary for the continued
operations of the Board shall be included in the annual General Appropriations Act.

SEC. 19. Repealing Clause. - All laws, presidential decrees, executive orders,
proclamations, rules and regulations which are inconsistent with the provisions of this
Act are hereby repealed or modified accordingly.

SEC. 20. Separability Clause. — If, for any reason, any section or provision of
this Act shall be held unconstitutional or invalid, the other section or provision not

otherwise affected shall remain valid.
SEC. 21. Effectivity Clause. - This Act shall take effect fifteen (15) days from its
publication in the Official Gazette or in at least two (2) newspapers of general

circulation.

Approved,