Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILL NO. 2578

Introduced by Honorable Mariano U. Piamonte Jr. and Honorable Julieta R.
Cortuna, Representatives, A TEACHER Party-list

EXPLANATORY NOTE

The 1987 Constitution mandates the State to establish and maintain a system of scholarship, grants and
student loans which shall be made available to deserving students in both public and private school,
especially to the underprivileged

However, while the government has implemented several financial assistance programs in an effort to
fulfil this constitutional mandate and to address the problem of lack of access to education due to poverty,
these programs are meagre and fragmented. Moreover, there is poor targeting of beneficiaries and lack of
coordination among the different implementing agencies.

This measure aims to strengthen, harmonize and refocus the existing programs 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 resources
development programs; improve equity and facilitate democratic access to quality education given
persistent income poverty and inequity. It covers not only scholarships, but also grants-in-aid and student
loans, also make a clear distinction among these terms. In addition, it 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.

In view of the foregoing reasons, immediate approval of this measure is earnestly sought.

JEP EE

MARIANO U. PIAMOMTE, JR.

JULIETA\R. CORTUNA


Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

HOUSE BILLNO,__ 2078

Introduced by Honorable Mariano U. Piamonte Jr. and Honorable Julieta R.
Cortuna, Representatives, A TEACHER Party-list

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
quality education for all citizens, 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 equity and rationalized
access to high quality higher and technical education among the poor, and those facing
temporary household liquidity constraints and capital market failure.

For these reasons, the existing scholarships, grants-in-aid and loan programs of
the national government for higher and technical education are hereby harmonized and
unified to improve their efficiency and ensure that access to and equity of educational
opportunities are given to deserving Filipinos who need them most

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

a) 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 resources development
programs;


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

©) To directly channel its resources to students to afford them freedom of informed
choices of programs and institutions, without prejudice to providing incentives to
promote certain priority programs including undersubscribed programs as
adopted by the Board created under this Act;

d) To 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 the circumstances of certain disadvantaged groups;

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

f) To promote an environment for bright and talented students to develop their full
potential and use them to serve the public good, 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, through a unified, improved, and expanded
scholarship program; and

g) To 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.

SEC. 4. Definition of Terms — For purposes of this Act, the following terms shall
mean

1) Unified Student Financial Assistance System for Higher and Technical
Education - refers to the harmonized, state-run and administered system of higher
education and technical-vocational scholarship, grants-in-aid and loan programs
under this Act;

2) Grant-in-Aid (GIA) - refers to a modality of student non-repayable financial
assistance to poor but eligible students; it generally requires a minimum level of
competence but not excellence;

3) Scholarship — refers to a modality of non-repayable 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;


4) Student Loan — refers to a modality of student financial assistance which
are short-term or long-term loans 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;

5) _ Rationalized Access - refers to improved efficiency in the implementation
of a comprehensive and unified student financial assistance program for tertiary
education pursuant to 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;

6) __ Tertiary Education — refers to the level or stage of education following the
secondary cycle which subsume post-secondary, non-degree program and higher
education programs. Tertiary education covers vocational-technical education and
training and higher education;

7) __ Higher Education - refers to the stage of formal education or its equivalent
requiring completion of secondary education and covering programs of study
leading to a bachelor and advanced degrees;

8) Higher Education Institution (HEI) - refers to an institution of higher
learning, primarily offering degree programs;

9) Technical Education/Technical-Vocational Education and Training (TVET) -
is 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 of economic life and social life,
comprises formal (organized programs as part of the school systems) and non-
formal (organized classes outside the school system) approaches;

10)  Technical-Vocational Institution (TVI) - refers to an institution offering
technical vocational education and training;

11) Local Universities and Colleges (LUCs) — refer to public education
institutions established by local government units through an enabling ordinance,
and financially supported and maintained by the concerned local government;

12) Special Public Higher Education Institutions (SPHEls) - refer to a category
of public organizations offering higher education programs related to public
service in pursuance of the basic mandates of their parent agencies and are


operated and controlled in accordance with special laws that created them: 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), Development Academy of the Philippines;

13) Special Private Higher Education Institutes (SPrHEls) — refer to a unique
type of Philippine higher education institutions offering a single or group of
specialized graduate degree program created by/for special interest/professional
groups;

14) State Universities and Colleges (SUCs) — refer 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;

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

16) Educational Expenses — refer to expenses related to the education of the
student, such as books, subsistence and board and lodging, but excluding tuition
and miscellaneous and other school fees;

17) 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;

18) Special Purpose Education 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;

19)  Honorific Scholarship — refers to a special recognition given to a deserving
student in terms of intellectual merit and special talents 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);


20) 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:

21) Grantee — refers to the recipient of any of the three enumerated modalities
of the Unified Student Financial Assistance System for Higher and Technical
Education referred to in Sec. 3, numbers 1, 2 and 3;

22) Scholar — refers to a student recipient of a scholarship grant;
23) GIA Beneficiary — refers to a student recipient of grant-in-aid;

24) Student-Borrower — refers to a student beneficiary of the National Student
Loan Program

25) Short-Term Student Loans - refer to loans payable on a
semestral/trimestral basis;

26) — Long-Term Student Loans ~ refer to loans repayable after the student
borrowers have completed their tertiary education within a period of at least ten
(10) years;

27) _ Delinquent Student-Borrower — refers to a student-borrower who has failed
to make loan payments that are already due and demandable, after a given grace
period;

28) _Defaulter - refers to a delinquent student-borrower who has failed to make
an overdue amortization or loan payment for a continuous period of time despite
repeated demands;

29) Parent or Guardian — refers to the head of the family, foster home, or
similar institutions who exercises custody or parental authority over the student;

30) 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;

31)  Board-Registered Programs and Institutions — refer 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;

32) Unit - refers to a prescribed standard of measure of college work usually
based on the hours of academic instruction;

33) 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.

34) 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;

35) Board - refers to the Unified Student Financial Assistance System for
Higher and Technical Education Board, which is the body responsible for the
review of existing government policies on student financial assistance programs,
promulgation of the minimum guidelines on student financial assistance programs,
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;

36) _ UniFAST Trust Fund - refers to the 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 collectively shall be accounted for distinct and separate
from the regular accounts of the implementing agencies and instrumentalities.

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 such as those enforced under the Expanded Government
Assistance for Students and Teachers in Private Education (E-GASTPE Law) or RA
8545, or the Private Education Student Financial Assistance (PESFA), or the State
Scholarship Program (RA 4090), and the current assistance programs and projects
created pursuant to pertinent provisions of special laws for specific sectors or special
beneficiaries shall be integrated in the UniFAST.

The Unified Student Financial Assistance System for Higher and Technical
Education under this Act 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 all tertiary student assistance programs funded by the national government
shall be required to take and pass the Board's national examination system, the
Qualifying Examination System for Scoring Students as provided hereafter, 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, as defined in Section 4 of this Act.

SEC. 6. Creation of a UniFAST Board — To carry out the purposes of this Act,
there is hereby created a Unified Student Financial Assistance System for Higher and
Technical Education (UniFAST) Board, hereinafter referred to as the Board, which shall
be attached to the Commission on Higher Education (CHED), consisting of five (5) ex-
officio members led by the CHED Chairperson as Chair, the DOST Secretary and the
TESDA Director-General as Co-Chairs, representatives from the Department of Labor
and Employment (DOLE) and the National Economic and Development Authority
(NEDA), and four (4) other ex-officio members from the Coordinating Council of Private
Educational Associations (COCOPEA), Philippine Association of State Universities and
Colleges (PASUC), Association of Local Colleges and Universities (ALCU), and the
Technical-Vocational Schools Association of the Philippines (TEVSAPHIL).

SEC. 7. Powers and Functions of the UniFAST Board ~ The UniFAST Board
shall have the following powers and functions:


a) Formulate and approve the national government student financial assistance

b)

°)

d)

e)

g,

h

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 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 UniFAST by its
technical staff and partner agencies, including monitoring, assessment and
impact evaluation of student financial assistance programs and projects;

Design and implement a uniform UniFAST Qualifying Examination System in
harmony with the national exit examination of the K to 12, or its equivalent, 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;


k)

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;

m) Primarily manage, administer, and supervise the UniFAST Trust Funds created

n

0)

P)

q

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 (BI), 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 government
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;

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;

s) 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;

t

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 terms of office of the officers and members of the
Board shall be determined by the President of the Philippines, without reappointment
Should the Member of a Board fail to complete a term, a successor shall be appointed
by the President. In the case of ex-officio members of the Board, their appointments
shall be co-terminous with their ex-officio positions.

SEC. 9. Meetings. The Board shall hold twelve (12) regular monthly meetings.
The Chair of the Board may call a special meeting when necessary: Provided, That the
members are notified in writing at least three (3) working days prior to said meeting. The
Chair of the Board shall be the presiding officer, and in his/her absence, either of the
Co-Chairs shall automatically take over. Minutes of all meetings shall be recorded and
attested to by a simple majority of all regular Board members.

At least one meeting of the Board per quarter shall be devoted to a review of the
performance 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;

(6) 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

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

SEC. 10. Quorum — All meetings shall be convened with a quorum of simple
majority of the regular Board members. All meetings convened without the said quorum
shall be deemed null and void


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

b) 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;

c)

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;

d

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;

e) 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

f) 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, a holder of at least a
Master's degree conferred by a reputable education institution, and is a 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;

b) Manage relationships with partner agencies;

°)

Exercise leadership, supervisory, and administrative functions over the

Secretariat;

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

e) Ensure the proper dissemination and implementation of Board decisions;

f) 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;

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

9)

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 UniFAST 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
UniFAST Board, subject to 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, the UniFAST Trust
Fund for Student Loans, hereinafter referred to as the UniFAST Loan Fund, and the
UniFAST Trust Fund for Grants-in-Aid and Scholarships, hereinafter referred to as the
UniFAST 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 borrowers, which include payment for the principal, interests,
and penalties, donations and contributions earmarked for the program, shall accrue to
the UniFAST 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 UniFAST 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. Erring 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
ules and regulations of the Civil Service Commission and other pertinent laws

SEC. 17. Accounting and Reporting, the UniFAST Trust Fund — A separate
books of account shall be kept in the implementing agency for the UniFAST 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. Minimum Qualifications of Applicants — The UniFAST 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;

°)

Score in the UniFAST Qualifying Examinations above the cut-off score, as
determined by the Board;

d) Good moral character with no criminal record;

e)

‘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;

g) 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.

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 qualified grantees based
‘on objective indicators derived from credible databases.

Grantees shall have at least the minimum level of preparedness and proficiency
to successfully complete good quality higher and technical education. The determination
of the level of preparedness and proficiency shall be based on the UniFAST Qualifying
Examination results for incoming freshmen students, or in the case of non-freshmen


students the general weighted average (GWA) of 80 percent or its equivalent for at least
the last two semesters enrolled in. The Board may also use complementary criteria in
addition to the Yearly Examination System for Scoring Students in the case of members
of marginalized sectors.

SEC. 20. Scholarships —A unified, improved, and expanded government-funded
scholarship program shall be instituted to promote an environment conducive for the
development of bright and talented students to serve the public good and enlarge the
pool of world class Filipino researchers, artists, creative innovators, thinkers and
leaders.

The financial amount for scholarships shall be determined by the Board. It shall
cover at least 100 percent of the average cost of tertiary education of the top ten (10)
public and private universities listed in the Registry of Programs and Institutions. It shall
also include the average cost of books and other educational materials required by the
program of study chosen by the scholarship recipient. Recipients whose residence is
outside of the location of the chosen tertiary institution shall also be entitled to a living
allowance.

The Board shall formulate and establish the policies and mechanisms for the
identification of qualified grantees based on meritorious scholastic achievement and
aptitude as determined by their UniFAST Qualifying Examination scores, or its
equivalent, and talent, exceptional ability, and skill as determined by their admission into
recognized specialized schools for the arts and trade, as identified by the Board.

SEC. 21. National Student Loan Program (NSLP) — As the overarching policy-
making body under this Bill, the UniFAST Board shall develop a long term plan for the
development of a self-sustaining 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 learned
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 accountability 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 to
successfully complete a good quality tertiary education, as determined by their Yearly
Examination System for Scoring Students results for incoming freshmen students, or in
the case of non-freshmen the general weighted average (GWA) of 80 percent or its
equivalent for at least the last two semesters enrolled in, in addition 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 — The UniFAST Board
shall establish the STL program with a seed capital appropriated from the UniFAST
Loan Fund to encourage and enable tertiary education institutions to strengthen,
expand, or establish their own or institution-based STL programs to alleviate the short-
term liquidity problems of students hereinafter, generally known as institutions-based
student loan program. Higher education institutions may apply for funding to the STL
relending program of the UniFAST, 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 UniFAST 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 school fees shall be paid directly to
the school concerned.

SEC. 25. Delivery, Collection and Repayment Mechanisms of 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
UniFAST Board resolution 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 borrowers under the student loan programs will not
be overburdened with regard to their ability to repay 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;

d) 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 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 himseltiherself 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 - The grantee and/or loan 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 loan given to the borrower has been paid in full.

In case the 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 and/or grantee intends to go abroad even before compliance
with the return of service obligation stipulated in the contract, he/she shall be required to
pay the total amount of scholarship or grant-in-aid in lieu of the return of service
obligation.

SEC. 29. Sanctions — Any grantee/loan 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/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 HEls. All
HEls are 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. The HEI may claim the total expenses incurred in
providing the scholarship and grant-in aid provided in 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 UniFAST 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 UniFAST Board and the Stakeholders
Accountability Council, and such findings will be used to improve the financial
management of the UniFAST 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 HEls and number of
graduates (by type of study program);

(i) 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, (ii) 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 UniFAST 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 UniFAST 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 of 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,