Republic of the Philippines

HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

House BILL No._ 1867
Introduced by HONORABLE ROMERO FEDERICO “MIRO” S. QUIMBO

EXPLANATORY NOTE

Despite the National Government’s mandate to make education accessible to all Filipinos, the
reality is that many impoverished Filipino families remain unable to send their children to
school and afford them a proper college education.

Even with the government's numerous student financial assistance programs, a recent study
commissioned by the Commission on Higher Education (CHED) on the different assistance
programs being implemented revealed that the student financial assistance programs
(STUFAPS) are meagre and fragmented. The study showed that STUFAPs have assisted
only around 60,000 students in 2011 or about 2% of approximately 2.7 million students.
National government spending on STUFAPs mostly goes to basic education, accounting for
about 62 % of the budget and only 23 % and 15% go to higher education and technical-
vocational education, respectively. Moreover, the study uncovered that these STUFAPs are
increasingly being enjoyed by student beneficiaries from higher income families, therefore
defeating the purpose of STUFAPs to assist students who are in fact in dire need of financial
assistance.

The study further showed that the reason behind low college students enrollment and
completion rates among the poor and near poor is due to their incapacity to pay for the initial
entrance fees and expenses required by higher education institutions (HEIs), therefore stifling
these students’ opportunity to even begin their higher education career.

Hence, the thrust now of the government is to not only to improve the capacity of the
government to assist students from low-income families in the completion of their education,
but more importantly, to improve its efficiency, and effectiveness and to ensure its equitable
distribution and sustainability.

This UNIFAST bill, which covers scholarships, grants and student loans, aims to strengthen,
harmonize and refocus the existing STUFAPS and to rationalize the allocation, utilization
and clientele-targeting of all public resources expended by national government agencies to
promote and maintain a harmonized and coherent national and regional human capital
development programs; improve equity and facilitate democratic access to quality education
given persistent income poverty and inequity.

In line with this policy, Grants-in-Aid will be established for students belonging to
marginalized sectors, taking into account the special needs and circumstances of certain


disadvantaged groups, particularly those students whose families are beneficiaries of the
government's Conditional Cash Transfer Program.

It also ensures regional equity in the distribution of student financial assistance slots; and
provide effective solutions to the liquidity issues facing students who are unable to borrow
from regular lending institutions and are thus prevented from pursuing or completing courses
of study, through the institutionalization of a self-sustaining National Student Loan Program
which shall provide qualified students short-term and long-term financial assistance for
tertiary education.

Likewise, the measure seeks to provide adequate funding and such other mechanisms to
increase the number of poor but academically able and highly motivated students to
successfully pursue and complete higher and technical education programs in quality
institutions while at the same time promote equity and rationalized access to high quality
tertiary education among the poor, and those facing temporary household liquidity constraints
and capital market failure.

This legislative measure is a counterpart of Senate Bill 58 which Senator Juan Edgardo
“Sonny” Angara has authored. With Senator Angara’s knowledge and support, this bill is
filed in the House of Representatives. In my shared vision and commitment with Senator
‘Angara to enhance the access and quality of education in the country, I am earnestly seeking
the immediate approval of this measure by Congress,

HON. ROMERO FEDERICO “MIRO” S. QUIMBO


Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILL NO. 1867

Introduced by HONORABLE ROMERO FEDERICO “MIRO” S, QUIMBO.

AN ACT PROVIDING FOR A COMPREHENSIVE AND UNIFIED SYSTEM OF
STUDENT FINANCIAL ASSISTANCE FOR HIGHER AND TECHNICAL
EDUCATION, THEREBY RATIONALIZING ACCESS, APPROPRIATING FUNDS
THEREFOR AND FOR OTHER PURPOSES

SECTION 1, Short Title ~ This Act shall be known as the Unified Student Financial
Assistance System for Higher and Technical Education Act,

SEC, 2. Declaration of Policy —It is the declared policy of the State to provide all its
citizens access to quality education, accelerate social progress and promote human liberation
and development. Towards this end, the State shall provide adequate funding and such other
mechanisms to increase the number of poor but academically able and highly motivated
students to successfully pursue and complete higher and technical education programs in
quality institutions, thereby promoting equitable and rationalized access by poor Filipinos to
high quality higher and technical education.

For these reasons, the existing national government programs for scholarships, grants-
in-aid and loans for higher and technical education are hereby unified and harmonized to
improve their efficiency and to ensure that deserving Filipinos are given equitable access to
educational opportunities.

SEC. 3. Objectives — The objectives of this Act are as follows:

To rationalize the allocation, utilization and clientele-targeting of all public resources
expended by national government agencies in order to promote and maintain
harmonized and coherent national and regional human capital development programs;

a)

b) To promote academic excellence among higher and technical education students
regardless of economic status, and ensure consistency, continuity and efficient
coordination of student financial assistance policies and programs;

©) To directly channel public resources to students in order to provide them the freedom

of informed choices of programs and institutions, while providing incentives to

promote certain priority programs, including undersubscribed programs, as adopted
by the Board created under this Act;


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3)

4)

5)

6)

7)

To promote equitable and democratic access to quality education as a social justice
measure to counter poverty and income inequality among Filipino families, by, among
others, establishing a government grants-in-aid program for students from the
marginalized sectors of Philippine society, taking into account the special needs and the
circumstances of certain disadvantaged groups,

To ensure regional equity in the distribution of student financial assistance slots;

To establish a unified, improved, and expanded scholarship program that will create an
environment conducive for bright and talented students developing their full potential and
participating in public service, encourage academic excellence among highly capable
students, motivate gifted youth to fully develop their talents, and enlarge the pool of
world class Filipino researchers, artists, creative innovators, thinkers and leaders; and

To institutionalize a self-sustaining National Student Loan Program that will provide
short- and long-term financial assistance to qualified students for tertiary education, in
order that such students will no longer be prevented from pursuing their dream of higher
education because they face liquidity issues and are unable to obtain tuition loans from
regular lending institutions

SEC, 4, Definition of Terms ~ For purposes of this Act:

“Average Cost of Tertiary Education” refers to the tuition fees and other related fees in
private schools, and in the case of SUCs, the cost per student, plus the cost of living
allowance and other incidental expenses:

“Blend? refers to a combination of the above modalities of student assistance such as GIA
and student loan, depending on the needs of the student applicant, as determined by the
Board;

“Board” refers to the Unified Student Financial Assistance System for Higher and
Technical Education (UniF AST) Board, which is the body responsible for the review of
existing government policies and the promulgation of the minimum guidelines on student
financial assistance programs, as well as the coordination and provision of support to
implementing agencies in fund allocation, formulation, approval and implementation of
national government student financial assistance policies and strategies for higher
education and programs offered or administered by national government agencies,

“Board-Registered Programs and Institutions” refers to quality-assured programs and
higher and technical education institutions which have been certified by the Commission
on Higher Education (CHED) and the Technical Education and Skills Development
Authority (TESDA) as complying with acceptable standards;

“Educational Expenses” refers to expenses related to the education of a student, such as
books, subsistence and board and lodging, but excluding tuition and miscellaneous and
other school fees;

“GIA Beneficiary” refers to a student recipient of grant-in-aid;

“Grantee” refers to the recipient of any of the three modalities of the UniF AS, namely,
scholarship, grant-in-aid and loan;


8) “Grants-in-Aid (or GIA)” refers to a modality of free financial assistance to poor but
eligible students which generally requires a minimum level of competence but not
excellence;

9) “Higher Education” refers to the stage of formal education, or its equivalent, requiring
completion of secondary education and covering programs of study leading to bachelor
and advanced degrees;

10) “Higher Education Institution (or HEI)” refers to an institution of higher learning,
primarily offering degree programs;

LI) “Honorific Scholarship” refers to a special recognition given to a deserving student in
terms of intellectual merit and special abilities, who is not exempted from paying tuition
and other fees, and for purposes of this Act, is not included under the term “Scholarship”
as defined in Section 4 (3);

12) “Local Universities and Colleges (or LUCs)” refers to public education institutions
established by local government units through an enabling ordinance, and financially
supported and maintained by the concerned local government,

13) “Long-Term Student Loans” refers to loans that are payable after the student borrowers
have completed their tertiary education within a period of at least ten (10) years;

14) “Miscellaneous and Other School Fees” refers to those fees which cover other necessary
costs supportive of instruction, including, but not limited to, medical and dental, athletic,
library and laboratory fees;

15) “National Government Agency” refers to any of the various units of the national
government, including a department, bureau, office, instrumentality, or government-
owned or controlled corporations, that either administers or finances the various
modalities of student financial assistance;

16) “Parent” ot “Guardian” refers to the head of the family, foster home, or similar
institutions who exercises custody or parental authority over the student;

17) “Qualifying Examination System for Scoring Students” refers to the appropriate annual
examination and assessment of potentials, separately designed for undergraduate and
graduate students to be developed by the Board in harmony with the national exit
examination of the K to 12 and administered on a national scale for all prospective
applicants to all modalities of student financial assistance for tertiary education:

18) “Rationalized Access” refers to improved efficiency in the implementation of a
comprehensive and unified student financial assistance program for tertiary education
pursuant fo the principles of increased participation of the economically disadvantaged
and marginalized sectors; equity in the regional distribution of economic resources;
congruence of the qualifications of tertiary education graduates and labor market needs;
and relevance to the country’s national development and global competitiveness, among
others;

19) “Registry of Programs and Institutions” refers to the registry of institutions and programs
to be created by the Board for institutions and programs that have met the quality
standards as certified by the CHED and TESDA;



20) “Scholar” refers to a student recipient of a scholarship grant;

21) “Scholarship” refers to a modality of free financial assistance given to deserving students
on the basis of merit, such as laudable academic performance, exemplary talent, special
technical proficiencies and skills. Scholarship also refers to the intellectual pursuits of a
scholar that give rise to research and development and innovations as well as other
creative works;

22) “Short-Term Student Loans” refers to loans payable on a semestral or trimestral basis;

23) “Special Public Higher Education Institutions (or SPHEIs)” refers to a category of public
organizations offering higher education programs related to public service in pursuance
with the basic mandate of their parent agencies and are operated and controlled in
accordance with special laws; they provide specialized academic, research and technical
assistance programs, such as public/business management, internal security, military
science and national defense, e.g, Philippine Military Academy (PMA), Philippine
National Police Academy (PNPA), and Development Academy of the Philippines,

24) “Special Private Higher Education Instinues (or SPrHEIs)” refers to @ unique type of
Philippine higher education institutions offering a single or group of specialized graduate
degree programs created by/for special interest/professional groups;

25) “Special Purpose Hducation Assistance” refers to financial assistance for the conduct of
undergraduate and graduate research, scientific studies, including funding assistance for
the writing and publication of books, manuscripts, theses, dissertations, scientific and
technical journals, or for production, filming and digital technology documentation of
research and studies or development of instructional and academic materials, and science
prototypes, among others;

26) “State Universities and Colleges (SUCs)” refers to public HEIs with independent and
separate governing boards established by national laws which constitute their individual
charters, and financed and maintained by the national government;

27) “Smudent Loan” refers to a modality of student financial assistance where short-term or
long-term loans are provided to finance the tertiary education of students facing liquidity
problems, regardless of economic status. These loans are debts to be paid by the student,
his/her parents, guardians, or co-makers:

28) “Studem-Borrower” refers to a student beneficiary of the National Student Loan Program,

29) “Technical Education’Technical-Vocational Education and Training (or TVET)” refers to
the education or training process which involves, in addition to general education, the
study of technical and related fields and the acquisition of practical skills relating to
‘occupations in various sectors, comprising formal (organized programs as part of the
school systems) and non-formal (organized classes outside the school system)
approaches;

30) “Tertiary Hducation” refers to the stage of education following the secondary cycle, and
includes higher education programs, post-secondary non-degree programs, and
vocational-technical education and training programs;


31) “UniFAST Trust Funds” refers to the Unified Student Financial Assistance for Higher and
TechnicalEducation (UniFAST) cross-subsidy benefit trust funds for Student Loans
(‘Loan Fund”) and the Grants-in-Aid and Scholarships (“GIAS Fund”) created under this
Act, which shall be the depository of all funds appropriated for scholarships from the
General Appropriations Act (GAA) and receipts from private grants and donations for
scholarship programs of government agencies and instrumentalities covered by this Act,
as well as earnings from investments of these monies, all of which shall collectively be
accounted for, distinct and separate from the regular accounts of the implementing
agencies and instrumentalities

32) “Unified Smdent Financial Assistance System for Higher and Technical Education (or
UniF/AST)” refers to the harmonized, state-run and administered system of higher
education and technical-vocational scholarship, grant-in-aid and loan programs under this

Act; and

33) “Unit” refers to a prescribed standard of measure of college work usually based on the
hours of academic instruction.

SEC. 5. Scope and Coverage of the UniFAST — There shall be instituted a unified
student financial assistance system, which shall be known as the Unified Student Financial
‘Assistance System for Higher and Technical Education (UniFAST), and which shall have as
integral components all existing financial assistance programs for higher and technical education
students in both public and private institutions, including national scholarships, grants-in-aid,
special purpose or sector educational assistance, student loans, and government programs in
partnership with other stakeholders, among others, and which are nationally funded and/or
implemented by national government agencies, branches and instrumentalities

All legislated student financial assistance programs pertaining to higher and technical
education shall be integrated into the UniFAST, including (i) programs under the Expanded
Government Assistance for Students and Teachers in Private Education (E-GASTPE Law) or
Republic Act No. 6728, as amended by Republic Act No. 8545, (ii) the Private Education Student
Financial Assistance (PESFA) program, (iti) the State Scholarship Program under Republic Act
No, 4090, as amended, and (iv) current assistance programs and projects created pursuant to
pertinent provisions of special laws for specific sectors or special beneficiaries,

‘The UniF AST shall harmonize, reform, strengthen, expand, rationalize, and re-focus all
ongoing student financial assistance programs of the government for greater efficiency,
coherence, synchronization, effective funding and improved coordination among implementing
entities in their specific jurisdiction: Provided, That there shall be implementation status quo of
effective programs implemented by other government agencies,

Notwithstanding this provision, the implementing agencies are required to submit reports,
make their selection process transparent to the public, and comply with the minimum
requirements that the Board may impose to ensure that these programs are in line with the
national policy framework on student financial assistance. Furthermore, all applicants of tertiary
student assistance programs funded by the national government shall be required to pass the
Qualifying Examination System for Scoring Students, to ensure that they have the capability to
learn and gain from tertiary education. For the same reason, all selected beneficiaries shall be
required to enrol only in tertiary education programs and institutions included in the Registry.

SEC. 6. Creation of a UniFAST Board To catty out the purposes of this Act, there is
hereby created a Unified Student Financial Assistance System for Higher and Technical


Education (UniF AST) Board, hereinafter referred to as the Board, which shall be attached to the
Commission on Higher Education (CHED), consisting of:

(1) the CHED Chairperson as ex-officio Chair;
(2) the DOST Secretary as ex-officio Co-Chair;
(3) the TESDA Director-General as ex-officio Co-Chair,

(4) a representative from the Department of Labor and Employment (DOLE) as ex-
officio member,

(5) a representative from the National Economic and Development Authority
(NEDA) as ex-officio member,

(6) one representative each from (i) the Coordinating Council of Private Educational
Associations (COCOPEA), (ii) the Philippine Association of State Universities
and Colleges (PASUC), (iii) the Association of Local Colleges and Universities
(ALCU), and (iv) the Technical-Vocational Schools Association of the
Philippines (TEVSAPHIL), to be appointed by the President of the Philippines.

SEC. 7, Powers and Functions of the Board ~ The Board shall have the following

powers and functions

a)

b)

co)

Formulate and approve the national government student financial assistance policies and
strategies for higher and technical education, and review existing policies to ensure
consistency with policy framework under this Act;

Facilitate the inclusion of members of marginalized sectors as grantees of the financial
assistance program to widen access to quality tertiary education and allow them to
meaningfully participate in governance and promote inclusive leadership;

Provide technical and financial assistance and other forms of support to implementing
agencies with proven effective programs to ensure the effective implementation of this
Act;

Coordinate with the implementing agencies of student financial assistance programs in
the formulation, approval and issuance of guidelines towards the development and
promotion of a comprehensive, unified system on student financial assistance to guide all
government agencies, branches and instrumentalities which administer student financial
assistance programs for higher and technical education, including the approval of this
Act’s implementing rules and regulations, consistent with the government's national
development framework;

Prepare, approve and submit to the Department of Budget and Management (DBM) its
own coherent budget proposal for student financial assistance, in addition to the
individual budget proposals of the various implementing agencies, including vetting and
integrating all requests for public funding of higher and technical education student
assistance programs;

Provide general guidelines for the drawing up of contracts with the student beneficiaries
specifying the rights and obligations of the parties, that may include a service clause or
such other stipulations of cost recovery the Board may deem in the best interest of the


8)

h)

)

k)

))

public and consistent with or responsive to national social, economic and human
resources development plans ;

Ensure faithful implementation of the policies and strategies of the UniF AST by its
technical staff and partner agencies, including monitoring, assessment and impact
evaluation of student financial assistance programs and projects;

Design and implement a Qualifying Examination System for Scoring Students in
harmony with the national exit examination of the K to 12, or its equivalent, in harmony
with the national exit examination of the K to 12, and based on this system and other
complementary criteria the Board may impose and formulate a transparent quantitative
scheme for scoring, ranking and selecting applicants for scholarships, Grants-In-Aid, and
student loans,

Promulgate the minimum guidelines, rules and regulations for determining qualified
beneficiaries of student financial assistance for higher and technical education;

Provide and promote a supportive policy environment for the growth and development of
private sector participation for loan programs;

Ensure that beneficiaries are able to maximize the benefits from UniFAST by providing
them data for informed decision-making and allowing them freedom of choice among,
accredited public and private tertiary education programs and institutions,

Formulate, approve and issue guidelines towards the development and promotion of a
comprehensive, unified student financial assistance system to guide all government
agencies, branches and instrumentalities which administer student financial assistance
programs for higher and technical education, including the approval of this Act’s
implementing rules and regulations, consistent with the government's national
development framework;

Primarily manage, administer, and supervise the UniFAST ‘Trust Funds created under this
Act, including the allocation and disbursement of funds to implement the program;

Develop and promote a system of individual savings accounts for higher and technical
education;

Design and implement a program of generating funds for the UniFAST Trust Funds;

Enter into agreements with private entities and financial institutions to promote the
funding and delivery of student loans, consistent with the policy framework as
determined by the Board;

Develop an efficient tracking system of Student-Borrowers, as well as a system of
disbursement and collection of payments of loans granted under this Act, including but
not limited to entering into agreements with the Bureau of Internal Revenue (BIR),
Government Service Insurance System (GSIS), the Social Security System (SSS),
National Bureau of Investigations, Department of Foreign Affairs (DFA), Philippine
Overseas Employment Administration (POEA), Bureau of Immigration (BD), Bangko
Sentral ng Pilipinas (BSP), Bankers Association of the Philippines (BAP), Credit
Information Corporation, private and public banks and banking intermediaries, credit
information bureaus, and other goverment financial institutions, inclusive of
investigating and checking the whereabouts of delinquent Student-Borrowers, and setting
up mechanisms for blacklisting of defaulting Student-Borrowers in application for loans,
credit cards, and other credit facilities;


1) Receive donations, legacies, gifts and other forms of contribution, whether in cash or in
kind, from both public and private sources here and abroad, which shall accrue to the
UniFAST Trust Funds created under this Act, and to receive and utilize the services and
assistance of experts: Provided, That such donations, legacies and contributions shall be
exempt from taxation and shall be allowable deductions for income tax purposes in
accordance with Section 34-H of the Tax Code of 1997, as amended;

8) Appoint an Investment Manager of proven competence and integrity for the Investment
Portfolio of the UniFAST Trust Funds, should it be deemed necessary; Provided that such
appointment should not exceed three (3) years, and subject to performance review prior to
renewal;

1) Set up, maintain and update an official Registry of quality-assured academic and research
program and tertiary education institutions in accordance with Sec, 3 of this Act; and

u) Perform such other powers and functions as may be deemed necessary and incidental for
the effective implementation of this Act.

SEC. 8, Term of Office ~ The members of the Board to be appointed by the President of
the Philippines shall have a term of office of two (2) years, without reappointment. In case of
resignation, removal, death or disability, the replacement member shall merely serve the
unexpired term of office and shall not be eligible for reappointment

SEC. 9, Meetings. The Board shall meet every month. The Chair of the Board may call
special meetings when necessary; Provided, That the members will be notified in writing at least
three (3) working days prior to said meeting. The presiding officer shall be the Chair of the
Board, or in his absence, one of the Co-Chairs.

At least once every quarter, the Board shall review the performance of the UniFAST
‘Trust Funds in terms of the following:

(1) Total number of current beneficiaries;

(2) Number of dropouts, voluntary or revoked;

(3) Average academic performance by year of study;

(4) Breakdown of Grantees by field of study;

(5) by district and region of origin;

(6) Breakdown of Grantees by place of study;

(7) Breakdown of Grantees by gender;

(8) Breakdown of Grantees by size of annual family income and family livelihood;
(9) Total amount of funds received;

(10) Total repayments made; and

(1) Current cash positions as against cash requirements for the quarter

SEC, 10, Quorum — The attendance of a majority of the Board members is necessary in
order for the Board to have a quorum to transact business,

SEC. 11, Creation of a UniFAST Secretariat — There is hereby created a Secretariat to
be headed by an Executive Director to support the Board in carrying out its functions, The Board
shall provide for the institutional set-up, qualifications and compensation of employees
composing the Secretariat in accordance with existing Civil Service and Career Executive Service
rules and regulations and consistent with the provision of the Salary Standardization Law for
government personnel, and determine the size and composition of the Secretariat



‘The Secretariat shall exercise the following functions:

a)

b)

d)

2)

f)

Provide technical and administrative support services to the Board's policy-making
and implementation functions,

Review, evaluate, and assess programs, plans of action and agenda of the Board, and
concomitantly recommend the approval or cancellation of such programs, plans of
action and agenda of the Board;

Review, evaluate, and assess programs, plans of action and agenda of the
implementing agencies, including proposals for funding, and recommend the approval
or cancellation of such programs, plans of action and agenda of the implementing
agencies to the Board;

Maintain and update a repository of data and information on all student financial
assistance programs for tertiary education administered by any government agency,
branch or instrumentality; The Secretariat shall create and maintain a comprehensive
database system on the government's student financial assistance programs accessible
to the public, pursuant to the policy of transparency and good governance;

Recommend, manage and monitor the processes of contracting out the
implementation of UniFAST activities which would be best accomplished by third
party providers, as approved by the Board ; and

Perform such other powers and functions as may be determined by the Board.

SEC. 12. The Executive Director ~ There shall be an Executive Director who shall be
appointed by the Board and shall have the rank of an Assistant Secretary, and shall hold office for
a fixed term of three (3) years, renewable for another three (3) years, based on the Board’s
assessment of his performance The Executive Director shall have a minimum of seven (7) years
managerial experience, be a holder of at least a Master’s degree conferred by a reputable
education institution, and be Career Executive Service Officer (CESO) eligible, The Executive
Director shall perform the following functions:

a)

Serve as the primary coordinator of publicly funded student financial assistance
programs for tertiary education students being implemented by various government
agencies, branches and instrumentalities,

Manage relationships with partner agencies;

Exercise leadership, supervisory, and administrative functions over the Secretariat;

Ensure the provision of accurate and timely technical inputs and feedback to the
Board to guide it in its policy-making functions;

Ensure the proper dissemination and implementation of Board decisions;
Submit an annual report on the operations, status of programs funded, and financial

conditions of the Secretariat, including recommendations for the budget in the
ensuing year;


g) Perform such other duties and functions as may be delegated to him/her by the Board;

SEC, 13. Creation of the Stakeholders Accountability Committee — To ensure
transparency and accountability, and institutionalize consultations with relevant sectors
concerned, there is hereby created a Stakeholders Accountability Committee (SAC) composed of
representatives from parents’ organizations, students’ groups, the youth sector, teachers and
educators’ groups, HEIs and TVIs, and industry, which shall be convened at least once a year by
the Board,

The SAC shall be empowered to inquire into the books of accounts, financial statements,
policy statements, issuances and other documents and information of the Board, subject 10
existing laws and regulations, to protect against misappropriation and mismanagement of the
UniFAST trust funds. Minutes of all meetings shall be recorded and attested to by a simple
majority of the SAC Members,

SEC. 14. Creation of UniFAST Trust Funds — To mitigate budgetary constraints, a
mechanism shall be created to ensure the availability of appropriations and cash to cover the
release for UniFAST funds. To this effect, (i) the UniFAST Trust Fund for Student Loans,
hereinafter referred to as the UniFAST Loan Fund, and (ii) the UniF AST Trust Fund for Grants-
in-Aid and Scholarships, hereinafter referred to as the UniF AST GIAS Fund, shall be created
under the power and supervision of the Board.

The existing funds and regular appropriations of each government agency, branch or
instrumentality which implements a student financial assistance program shall automatically form
part of the UniFAST GIAS Fund. Each implementing agency, branch or instrumentality shall
manage and be accountable for its own share of the funds which shall be clearly delineated as
forming part of the UniFAST Trust Funds, subject to the oversight and supervisory powers of and
program standards set by the Board.

The UniFAST GIAS Fund shall be created to address issues arising from the lack of
synchronization between the fiscal year (January to December) and the academic year (June to
May) and from other financial flow problems. The non-synchronization causes a misalignment
which in turn causes delayed payment of benefits to Grantees, leading to serious difficulties for
very poor students, Earnings of the Trust Fund shall accrue back to the Trust Fund and be deemed
automatically appropriated, subject to Board approval of its use.

All appropriations for the National Student Loan Program and amounts derived from loan
repayments of Student-Borrowers, which include payment for the principal, interests, and
penalties, donations and contributions earmarked for the program, shall accrue to the UniF AST
Loan Fund

SEC. 15, Planning and Budgeting the UniFAST Trust Funds ~ The Department of
Budget and Management (DBM) shall release the funds appropriated for all three UniFASTS
modalities in two tranches, half at the beginning of the second quarter and the balance at the
beginning of the third quarter of the fiscal year. ‘These releases will be withdrawn in full and
deposited into the UniFAST Trust Funds, The availability of the funds in the trust fund will give
implementers a more concrete basis for planning its use and sufficient time to firm up the
financial plan associated with its usage

SEC. 16. Financial Management and Accountability — All public funds allocated to the
government's student financial assistance programs for higher and technical education shall be
managed according to standard government accounting and auditing rules and regulations. In


addition, specialized processes and procedures shall be developed to enhance transparency and
accountability suitable to the program or project for which the fund has been provided. Brring
officials and employees who mismanage or misappropriate UniFAST funds shall be subject to
reprimand, suspension, dismissal from service, and other disciplinary sanctions pursuant to
existing rules and regulations of the Civil Service Commission and other pertinent laws,

SEC, 17. Accounting and Reporting, UniFAST Trust Fund — A separate books of
account shall be kept in the implementing, agency for the UniF AST Trust Fund, It shall follow
standard government rules and regulations for accounting of trust funds. Implementing agencies
of the trust fund, however, may adopt additional measures to insure its safety particularly in
authorizing payments and processing of disbursements from the fund

A mid-year and annual report shall be prepared by all implementing agencies. The
report shall have two parts, a financial statement and a physical report of operations showing
accomplishment of the fund. These reports shall be submitted to Congress and the DBM to
inform and aid in decision making and shall be made available to others for valid and acceptable
reasons

SEC. 18. Mininuan Qualifications of Applicants - The Board shall promulgate and
periodically review the qualification criteria for applicants for any of the three modalities of
student financial assistance, subject to the Following minimum qualifications

a) Filipino citizen;
b) High School graduate or its equivalent from duly authorized institutions;

©) Obtained at least the score required by the Board for the Qualifying Examination
System for Scoring Students;

d) Good moral character with no criminal record,

@) Admission to the technical and vocational institution, college, or university included
in the Registry of Programs and Institutions, of his/her choice;

f) In the case of applicants in technical-vocational programs, he/she shall, in addition to
the criteria referred above, pass the TESDA screening/assessment procedure, trade
test, or skills competency evaluation;

2) Must not be a recipient of another government financial assistance program of the full
amount at the time of application or during the effectivity of the scholarship, GIA or
loan grant; and

h) Such other qualifications as may be prescribed by the Board.

Provided, that for grants-in-aid and scholarships, priority shall be given to students whose
families are beneficiaries of the government's Conditional Cash Transfer Program

SEC, 19, Grants-In-Aid — To improve equity and facilitate democratic access to quality
education given persistent income poverty and inequity, Grants-In-Aid are targeted for students
belonging to poor families and marginalized sectors, consistent with official definitions, The
financial amount comprising Grants-In-Aid will be determined by the Board, provided that it


shall cover at least one hundred (100) percent of the average Cost of tertiary education in the top
forty (40) of the public and private universities listed in the Registry of Programs and Institutions,

‘The grant shall include an amount for basic living expenses that will enable the Grantee
to focus on completing his/her tertiary education, The Board shall formulate and establish the
policies and mechanisms for the identification of Grantees based on objective indicators derived
from credible databases.

SEC. 20, Scholarships — A unified, improved, and expanded government-funded
scholarship program shall be instituted fo promote an ‘environment conducive for the
Slevelopment of bright and talented students ¢0 serve the public good and enlarge the pool of
se ee Filipino researchers, artist, creative innovators, thinkers and leaders

‘The financial amount for scholarships shall be determined by the Board. It shall cover at
teast 100 percent of the average cost of tertiary education of the top Tr (10) publie and private
rea sities sted in the Registry of Programs and Institutions. I shall also include the average
wef books and other educational materials required by the prostatt of study chosen by the
<cholarship recipient. Recipients whose residence is outside of the Tocation of the chosen tertiary
institution shall also be entitled to a living allowance.

SEC. 21. National Student Loan Program (NSLP) ~ As the overarching policy-making
body under this Bill, the Board shall develop a Jong, 61's plan for the development of a self
aeetkining National Student Loan Program (NSLP), which shall provide qualified students short-
term and long term financial assistance for tertiary education. This plan shall be based on a
systematic evaluation of and lessons Tearmed from current ‘and past student loan schemes, both
local and international.

The development of the NSLP shall be based on the professionalization of its
management, the establishment of an appropriate organizational set-up and the institution of
saeaatability mechanisms, sanctions and incentives conducive for the effective and efficient
collection of loan repayments.

SEC, 22. Student Loans — Short and long-term student loans shall address liquidity
issues facing students who are unable to borrow at reasonable market interest rates and are
prevented from pursuing or completing courses of study Student-Borrowers shall have at least
the minimum level of preparedness and proficiency (0 sucessfully complete a good quality
feniary education, as determined by their Yearly Examination System for Scoring Students
tery for incoming freshmen students, or in the case of nonefreshmen the general weighted
rRerage (GWA) of 80 percent or its equivalent for at Teast (he Jast two semesters enrolled in, in
aveition to such other criteria as may be determined by the Board to measure their capability to
repay the loan

SEC. 23. Short-Term Student Lending (STL) Program ~ "he Board shall establish the
STL. program with a seed capital appropriated from the UniFAST Loan Fund to encourage and
Stable tertiary education institutions to strengthen, expand, or establish their own ot institution-
fused STL programs to alleviate the short-term liquidity problems of students hereinafter,
generally known as institutions-based student loan proerem Higher education institutions may
spply for funding to the STL relending program of the ‘UniF AST, subject to Board approval

‘The Board shall develop the STL Rules and Guidelines (STL-RG) to ensure good
governance, efficiency and equity in the use of ‘UniFAST’s STL funds. The Board shall formulate


the guidelines on the imposition of interest rates, in the case of short-term student loans to secure
the sustainability of the fund while at the same time ensuring its affordability to students.

SEC. 24. Loanable Amount, Long-Term Loans — The Board shall determine the
maximum amount that can be availed of by the Student-Borrower to cover the cost of education.
Educational loans under this Act shall cover tuition and other school fees and may also cover
related educational expenses, such as, but not limited to books, subsistence, and board and
lodging depending on the financial need of the Student-Borrower: Provided, That student loans
shall in no case exceed seventy-five percent (75%) of average cost of tertiary education in the top
forty (40) of the public and private universities listed in the Registry of Programs and Institutions
Provided further, that loans granted for payment of tuition and other schoo! fees shall be paid
directly to the school concerned

SEC. 25. Delivery, Collection and Repayment Mechanisms Student Loans ~ The Board
shall develop an efficient delivery and collection system that is accessible to its target clientele. It
shall establish policies, instruments and cooperative arrangements with concerned government
and private entities for ensuring efficient loan delivery, collection and loan repayment, including
collaboration with the National Bureau of Investigation, Bureau of Immigration, Bureau of
Internal Revenue (BIR), Credit Rating Agencies, and Government Financial Institutions like the
Government Service Insurance System (GSIS), Social Security System (SSS), Development
Bank of the Philippines, and the Land Bank of the Philippines.

The GSIS and SSS are hereby mandated to establish an automatic system of salary
deduction for student loan repayments of members with unpaid student loans: Provided, That the
collection of said repayments have been formally authorized by a resolution of the Board and are
in accordance with the Memorandum of Agreement to be signed by the Board with the GSIS and
SSS, separately,

Exploratory activities shall include systematic testing and rigorous evaluation of ways to
minimize the risk of non-repayment of loans and collection costs. It shall encourage private sector
participation to ensure the delivery of the best possible service suitable to the needs and
objectives of the NSLP.

SEC. 26. Loan Repayment Scheme and Interest Rates - In the formulation of policies
regarding the interest rate and loan repayment and collection scheme for the NSLP, the following
principles must be observed:

a) The Repayment scheme should ensure sustainability of the Loan Fund and at the same
time ensure that Student-Borrowers are not overburdened with repaying the loan;

b) Fixed and variable interest rates on loans shall be made available to Student-Borrowers:
Provided, That the interest rate and other charges take into account the inflation rate,
cost of administration and collection, provision for default, and the cost of government
borrowing, to ensure the sustainability of the Loan Fund in real terms;

©) Voluntary repayment of long-term loans shall start anytime the loan borrower wants to
pay even before finishing the course or having gainful employment: Provided, That a
reduced rate shall apply, as may be determined by the Board;

4) A Student-Borrower who has signed a contract with the implementing government
agency may opt to render service, such as teaching or research, among others, subject to
the guidelines which the Board shall formulate, in lieu of cash payment for student
loans:


e) The Board shall be authorized to extend, based on evidence, the term of repayment in
case the monthly salary and other incomes of the Student-Borrower shall have been
assessed objectively to be inadequate to pay for the regular monthly loan repayments, as
specified in the original student loan contract agreed to by the Student-Borrower and
the Board;

f) The government, through the DOLE, shall endeavor to give priority to Student-
Borrowers under the program in facilitating possible employment after finishing their
higher or technical education. The DOLE is hereby mandated to adopt pro-active
policies, plans and programs to assist the Student-Borrower in finding gainful
employment after graduation,

SEC. 27. Disqualifications and Limitations - The right of any student beneficiary to
avail himself/herself of the benefits of the student financial assistance programs under this Act
shall not apply if the student fails to comply with the requirements for Good Academic Standing
and such other limitations that may be formulated and imposed by the Board;

SEC. 28, Signing of Contract ~ Each Grantee or Student-Borrower shall sign a contract
of obligation with the Board and the implementing agency prior to the grant of scholarship/grant-
in-aid/student loan, Such contract shall include the following

1) Return of service obligation for scholarship and grant-in-aid;

2). Specific regular schedule of repayment agreement;

3)_ Inclusion of a guarantor who is a GSIS or SSS member in the student loan agreement;

4) Prohibition from leaving the country until the required return of service obligation, in

the case of scholarship and/or grant-in-aid, has been rendered in full or the amount of

Joan given to the Student-Borrower has been paid in full

In case the Student-Borrower intends to go abroad, he/she shall be required to pay the
remaining balance of the loan granted under the NSLP.

In case the scholar or Grantee intends to go abroad even before compliance with the
retum of service obligation stipulated in the contract, he/she shall be required to pay the total
amount of scholarship or gran id in lieu of the return of service obligation.

SEC. 29, Sanctions — Any Grantee or Student-Borrower found to have grossly violated
any of the provisions of his/her contract with the implementing agency or the Board shall be
meted the following sanctions:

For Scholarships/Grants-In- Aid:

1) Full payment of the amount equivalent to the scholarship/grant-in-aid given to the
scholar;

2) Cancellation of passport in case the Scholar or Grantee has left for abroad without
notifying the Board and failing to comply with the return of service obligation;


3) Other sanctions as may be deemed necessary by the Board to ensure timely collection
of and/or full payment of the amount of scholarship or grant-in-aid in lieu of the return of
service obligation.

For Student Loans:
1) Denial of further access to credit in any bank or government financial institution;

2) Collection of the remaining balance of the loan from the guarantor in accordance with
the terms and agreements stipulated in the contract;

3) Filing of complaint with the Department of Justice after sufficient time and notice has
been issued to the Student-Borrower who has defaulted on his/her loan payments,
subject to the Constitutional provision on the right to due process; and

4) Other sanctions as may be deemed necessary by the Board to ensure timely collection
of due student loan repayments

SEC. 30. Voluntary Provision of Scholarship and Grant-In-Aid by HEIs. All HEIs ave
hereby encouraged to provide scholarships and grants-in-aid to poor but deserving students
representing at least five percent (5%) of the student population.

SEC, 31. Tax Incentives. An HEI may claim its total expenses for providing the
scholarship and grant-in-aid under this Act as tax deductions in proportion to the scholarship
given: Provided, That the total expenses shall be allowed as deductions from the HEI’s gross
income for the taxable year that the expenses were incurred for the scholarship: Provided, further,
‘That the total amount of the claimed tax deductions net of value-added Tax (VAT), if applicable,
shall be included in their gross income or revenues derived from their school operations for tax
purposes in accordance with the provisions on allowable deductions covered by Chapter VII of
the National Internal Revenue Code of 1997, as amended.

SEC. 32. Audit of the UniFAST Trust Funds The UniF AST Trust Fund will be subject
to annual audit by the Commission on Audit (COA), subject to existing auditing laws and
regulations. The COA shall discuss its findings with the implementing agency, and make its
findings available to the Board and the Stakeholders Accountability Council, and such findings
will be used to improve the financial management of the UniF AST Trust Funds. It shall also be
used to pinpoint accountability and responsibility in the event that there is mismanagement or
misappropriation of the fund.

SEC. 33. Performance Monitoring and Impact Assessment — The UniFAST shall be
evaluated rigorously by the Board in terms of its impact on desired results and its progress
towards achieving them shall be monitored regularly. The Board shall clearly define those results
and their target values. Impact evaluation shall be measured against, among others:

(i) education outcomes such as enrolment in good quality HEIs and number of graduates (by
type of study program);

(ii) economic indicators such as income and employment; and

(iii) Indicators for contributions to community service and public good.

Performance and progress shall, in addition, be measured with regard to: (i) number of
students covered by GIAs, scholarships and student loans; (ii) by type of study program, (iii)


quality of HEI enrolled in, and (iv) initial economic status. Tracer studies and survey data for
experimental and quasi-experimental analyses shall be undertaken to produce credible impact
evaluation studies, as may be determined by the Board; Provided, That major programs of the
Board are to be evaluated within five (5) years from the date of its implementation

SEC. 34, Transitory Provision — Existing technical-vocational scholarship programs
under the Technical Education Skills Development Authority (TESDA), scholarships for
members of indigenous peoples under the Indigenous Peoples Rights Act (IPRA), the National
Agriculture and Fisheries Education System (NAFES), Agriculture Competitiveness
Enhancement Fund Scholarship (ACEFS), and similar state-funded scholarship programs shall
continue to be under the jurisdiction of the agencies currently responsible for their design and
implementation: Provided, That the clientele-targeting and standards for selection and retention
and awards shall be compliant with the overall policies on quality, sustainability and efficiency
set by the Board.

Agencies currently responsible for the implementation of the Priority Development
‘Assistance Fund (PDAF) of legislators allotted for tertiary level scholarships shall continue with
the present arrangements, until such time that more effective alternative implementation
arrangements have been formulated and approved by the Board in consultation with Congress

The above transitory provisions notwithstanding, the stipulations in the last paragraph of
Section 4 on submission of reports, selection transparency, the use of a Qualifying Examination
System for Scoring Students, and other requirements mentioned therein shall be complied with
upon the approval of the Implementing Rules and Regulations of this Act.

SEC. 35. Implementing Rules and Regulations ~ The Board, shall, within sixty (60)
days from the effectivity of this Act, constitute a Technical Working Group (TWG) composed of
relevant stakeholders in higher and technical education to promulgate the implementing rules and
regulations necessary for the proper implementation of this Act, to be submitted to the Board for
its approval

SEC. 36. Congressional Oversight Committee. There is hereby created a Congressional
Oversight Committee composed of five members each from the Committees on Higher and
‘Technical Education of the Senate of the Philippines and the House of Representatives. The
members from the Senate shall be appointed by the Senate President based on proportional
representation of the parties or coalitions therein with at least two (2) senators representing the
minority. The members from the House of Representatives shall be appointed by the Speaker also
based on proportional representation of the parties or coalitions therein with at least two (2)
congressmen representing the minority.

The oversight committee shall have the power to oversee the implementation of this Act
Provided, that the Secretariat of the Oversight Committee shall be drawn from the existing
Secretariat personnel of the committees comprising the oversight.

Funding shall be taken from the appropriations of both the Senate and the House of
Representatives

SEC. 37. Appropriations ~ There is hereby appropriated the sum of Twenty Five Billion
Pesos (P25 Billion), of which Fifteen Billion Pesos (15 Billion) shall come from the President's
Social Fund and another Ten Billion Pesos (P10 Billion) from funds in the National Treasury not
otherwise appropriated, and consisting of existing student financial assistance programs for
higher and technical education of all national government agencies, branches and


instrumentalities, to be used to finance the institution of the UNIFAST. Thereafter, such other
sums as may be necessary for its continued implementation shall be included in the Annual
General Appropriations Act.

‘The government shall also increase the total budget for student financial assistance at the
rate of not less than the growth rate of the Gross Domestic Product (GDP) for the next ten years
‘At the end of said period, the ratio of the budget for student financial assistance shall have been
increased from ten percent (10%) to fifty percent (50%) of the total direct national government
subsidy of SUCS

Other sources of funds such as grants, donations, and other forms of assistance from local
and foreign donor agencies and other public or private entities and other private domestic and
international sources may be tapped and facilitated by the Board to support the program, subject
to regular auditing guidelines and procedures. Cost-sharing or counter-parting schemes among
national government and LGUs shall also be encouraged to support the implementation of the
UNIFAST

SEC, 38, Separability Clause ~ If for any reason any provision of this Act is declared
unconstitutional or invalid, parts or provisions of this Act which are not affected shall continue to
be in full force and effect

SEC. 39, Non-Impairment Clause ~ Nothing in this Act shall be construed as to
diminish, impair, or repeal rights recognized, granted, or made available to disadvantaged,
marginalized, or specific sectors under existing laws.

SEC. 40, Repealing Clause All laws, executive orders, presidential decrees,
implementing rules and regulations inconsistent with this Act are hereby repealed or modified
accordingly, including the provisions RA 8545 on higher and technical education,

SEC. 41. Effectivity ~ This Act shall take effect fifteen (15) days after its publication in a
newspaper of general circulation.

Approved,