Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

House Bill No,__ 6122

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
CREATING A NATIONAL STUDENT LOAN BOARD TO IMPLEMENT A
NATIONAL STUDENT LOAN PROGRAM FOR THE POOR, DEFINING ITS
IMPLEMENTING GUIDELINES, RULES AND REGULATIONS AND
APPROPRIATING FUNDS THEREFOR

EXPLANATORY NOTE

Easy access to higher education opportunities remains elusive especially
for the poor. Enough emphasis has been given to this fact but a lot remains to
be done since education is considered a strategic key out of poverty. In the
country, a little over 11 % of the labor force has a college education. Moreover,
in our college-age population, less than 50% are enrolled in tertiary educational
institutions and about 70% live below the poverty line.

This proposed measure, therefore, seeks to create a National Student
Loan Board which will implement a National Student Loan Program for the poor,
define its powers and functions and appropriate the necessary funds.

Under the bill, the University of the Philippines (UP) will be implementing a
cross-subsidy program which will be replicated nationwide. As a result,
mandatory monthly contributions shall be made by persons within specific
income brackets and that such a fund collected shall go into the national student
loan fund. These contributions will be graduated according to income brackets.


There is no doubt on the need for such a national student loan program to
assist the poor and needy and provide them access to tertiary education.
Empowering them with decent education will give them more opportunities and
help alleviate their impoverished lives. If we wish to become the next economic
tiger of Asia, we need to educate our country’s less-fortunate and make them
major contributors in Philippine society and in nation building

Given the paramount importance of this proposal, its expeditious passage
into law is earnestly sought.

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DIOSDADO .CAPAGAL ARROYO GLO} a ARROYO
Second District, Camarines Sur Second District, Pampanga

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS.
Second Regular Session

6121

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
CREATING A NATIONAL STUDENT LOAN BOARD TO IMPLEMENT A
NATIONAL STUDENT LOAN PROGRAM FOR THE POOR, DEFINING ITS
IMPLEMENTING GUIDELINES, RULES AND REGULATIONS 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. - This Act shall be known as the "National
Student Loan Program for the Poor Act of 2011."

SECTION 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.

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

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

) Monthly Contributions — hereinafter called "contributions" shall refer to
the contributions of designated, income earners to the Fund, based on the
National Economic Development Administration (NEDA) income brackets:

f) 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.

SECTION 4. Composition of the 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 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 regular and emergency meetings called by the Board

2) 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 National
Student Loan Board. The Secretary of the DSWD shall receive per diems
to be paid for attendance in regular and emergency meetings called by the
Board.

3) Executive Director of the Student Loan Board — There shall be an
Executive Director of the Student Loan Board to be appointed by the
President of the Philippines. The Executive Director must be a natural
born citizen of the country, and must have passed the Career Executive
Service Officers (CESO) examination. The Executive Director shall
receive a monthly compensation equivalent to salary grade 28. The
Executive Director shall serve a term of three (3) years and can be
reappointed for another one (1) term


4) 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 President of the Philippines. 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.

5) 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 ex-officio members of the
Board. They shall receive per diems to be paid for attendance in regular
and emergency meetings called by the Board. The ex-officio members of
the board shall have no power to vote.

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

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

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

c) To appoint the necessary staff and/or employees for the National
Student Loan Board;

d) To allocate and disburse funds for the education of the poor;

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

f) 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;

g) 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.

SECTION 6. Meetings of the Board. — The National Student Loan Board
shall hold twelve (12) regular board meetings every year to be held every first
Monday of the month. The Chairperson of the Board shall be the presiding
officer. In the absence of the Chairperson, the Vice-Chairperson of the Board
shall automatically take over.

SECTION 7. Quorum for National Student Loan Board Meetings. — All
regular and emergency 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 the said quorum shall be deemed null and void.

SECTION 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:

a) 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;

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

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

e) To conduct annual spot and random inspections on borrowers;

f) To conduct studies and researches for the improvement of
educational services for the poor;

g) To reprimand, suspend or dismiss erring officials and employees
of the Student Loan Board based on the existing rules and
regulations of the Civil Service Commission;

j) To appoint the necessary staff and/or employees for the
Executive Committee of the National Student Loan Board;

k) To recommend the cancellation or revocation of loans; and


!) To perform such other powers and functions as may be
determined by the Board.

SECTION 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.

SECTION 10. Planning Model. ~ For purposes of developing the relevant
implementing details of the National Student Loan Program, the Board shall use
as a principal reference the Socialized Tuition Fee Assistance Program (STFAP)
of the University of the Philippines.

SECTION 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.

SECTION 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 DepED
and are included in a list of qualified tertiary educational institutions prepared by
the Board for this purpose.

SECTION 13. Contributor Income Bracket. — The Director-General of the
National Economic and Development Authority (NEDA) is hereby directed to
assist the 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 1/2%
of individual income bracket to a maximum of 4% of individual income bracket.

SECTION 14. Beneficiary Loan Amount. — The loan available to an Iskolar
shall be semestral, and shall be subject to the following terms and conditions:

a) 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.

c) Loan repayment — loans shall carry an annual interest rate of 5%,
payable over five (5) years commencing the first year after the graduation
of the /skolar. 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 of /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 Iskolar's needs shall have to be derived from
other sources.

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

SECTION 15. Mandatory Contributions. — All income eamers as
determined under Section 9 above are hereby required to contribute to the Fund.
Such mandatory contribution shall be based on NEDA income brackets

SECTION 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

SECTION 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.

SECTION 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.


SECTION 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.

SECTION 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.

SECTION 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,