Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

Fifteenth Congress
First Regular Session

HOUSE BILL No. 1831

Introduced by Honorable Rodante D. Marcoleta

EXPLANATORY NOTE

This bill seeks to create a National Student Loan Program for the
poor.

It is the policy of the State to protect and promote the right of all
citizens to affordable quality education and to take appropriate steps to
ensure that education shall be accessible to all. Notwithstanding this policy,
many talented young people cannot pursue: college education for lack of
financial resources. The importance of providing access to higher education
for the poor cannot be overemphasized. Statistics show that of the college
age population, less than 50% are enrolled in tertiary educational institutions
and about 70% are living below the poverty line.

A National Student Loan Fund for the poor, an extension on a
nationwide basis of the cross-subsidy program of the University of the
Philippines (UP) will be an effective solution to the problem of
inaccessibility of college education to those who belong to the lower income
bracket of society. Monetary contributions shall be made by persons within
specific income brackets that will go into the National Students Loan Fund,
and these contributions will be graduated according to the income bracket of
the student.

This bill therefore aims to bring our country closer to the vision of the
1987 Constitution. No less than four provisions of the Constitution contain
languages that are pertinent to the proposal to improve education.
Indubitably, there is a great need to provide a National Student Loan
Program to assist the poor and the needy by giving them access to tertiary
education. Indeed, we will only be able to attain our vision of becoming
economically progressive by educating the less fortunate of our people.

In view of the foregoing, passage of this bill is earnestly requested.

R NTE’D. MARCOLET,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Fifteenth Congress
First Regular Session

HOUSE BILL NO. 1331

Introduced by Honorable Rodante D. Marcoleta

AN ACT
CREATING A NATIONAL STUDENT LOAN PROGRAM FOR THE
POOR AND APPROPRIATING FUNDS THEREFOR.

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

SECTION 1. Short Title. — This Act shall be known as the "National
‘Student Loan Program for the Poor Act of 2010."

SEC. 2. Definition of Terms. ~ For the purpose of this Act:

a) "Scholar" refers to a designated qualified beneficiary of
contributors who draws from the National Student Loan Fund to support his
tertiary education;

b) "National Student Loan Fund" refers to a cross-subsidy benefit
fund collected by the National Government and lent to qualified scholars;

c) "National Student Loan Board" refers to a governing body
under the Office of the President tasked to implement the provisions of this
Act;

d) "Board of Directors" refers to the governing body of the
Student Loan Board and shall exercise the powers and duties hereinafter
defined;

e) "Monthly Contribution" refers to the voluntary contributions of
income earners to the Fund, based on the National Economic Development
Authority (NEDA) income brackets;

f) "Income Brackets" refers to a classification system wherein
income earners as contributors to the fund are ranked according to annual

family income.


SEC. 3. National Student Loan Board. — There is hereby
created a National Student Loan Board, hereinafter referred to as the Board.
The Board is composed of the Secretary of Education as ex-officio
Chairman, the Chairman of the Commission on Higher Education (CHED)
as ex-officio Vice-Chairman and the heads of the following government
agencies or their representatives as ex-officio members:

(1) Government Service Insurance System (GSIS);

(2) Social Security System (SSS);

(3) Philippine Overseas Employment Administration (POEA);

(4) _ Technical Education and Skills Development Authority (TESDA);

(5) Presidential Commission for the Urban Poor (PCUP); and

(6) League of Provincial Governors.

The President of the Philippines shall appoint ten (10) other members
of the Board, eight (8) of whom shall be chosen from nominees taken from
state universities and colleges and two (2) from nominees taken from non-
governmental organizations involved in education.

SEC. 4. Powers and Functions. — The powers and functions of the
Board are as follows:

a) Formulate the National Student Loan Program for the poor
within one (1) year after the effectivity of this Act;

b) _ Promulgate the necessary guidelines, rules or regulations for the
lending of funds for the education of the poor;

c) Allocate and disburse funds for the education of the poor;

d) — Cancel, suspend, or revoke loans in case of deceit, fraud or
cheating of any kind on the part of the borrower;

e) Implement the orders, rules, regulations and guidelines passed
by the Board pursuant to the National Student Loan Program;

f) Conduct annual spot and random inspections on borrowers;

g) Conduct studies and researches for the improvement of
educational services for the poor;

h) Appoint the necessary staff or employees for the Board;

i) Reprimand, suspend or dismiss erring officials and employees
of the Student Loan Board based on the rules and regulations of the Civil

Service Commission;


a) Act as trustees for the Investment Portfolio Fund which shall be
created out of its excess over semestral operating and lending requirements;

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

) Appoint, every three (3) years, a professional actuary to
perform an actuarial review of the Student Loan Fund;

m) Report to the Office of the President on a monthly basis; and

n) Perform such other powers and functions as may be deemed
necessary by the President of the Philippines.

SEC. 5. Term of Office. — The members of the Board shall hold
office for a term of three (3) years after their appointment or until their
successors shall have been appointed and qualified. Should a member of the
Board fail to complete the term, the successor shall be appointed by the
President of the Philippines but only for the unexpired portion of the term.

The members of the Board shall be entitled to reasonable traveling
expenses and honoraria.

SEC. 6. Meetings of the Board. — The Board shall hold regular
meetings to be held every first Monday of the month. The Chairman of the
Board shall be the presiding officer. In the absence of the Chairman, the
Vice-Chairman of the Board shall automatically take over. Minutes of all
meetings shall be recorded and attested to by a simple majority of all regular
Board members.

A. _ At least one meeting shall be devoted to a review of the Student
Loan Fund's performance in terms of the following:

i) Total number of current beneficiaries;

ii) Number of dropouts, voluntary or revoked:

iii) Average academic performance by year of study;

iv) Breakdown of scholars by field of study;

v) Breakdown of scholars by region of origin;

vi) Breakdown of scholars by place of study; and


vii) Breakdown of, scholars by size of annual family income and

family livelihood.

B. At least one meeting shall be devoted to the review and
approval of individual scholars.

C. — At least one meeting per quarter shall be devoted to a financial
review of the Student Loan Fund. This review shall cover, among others,
the following:

(i) Total contributions received;

(ii) Total repayments made; and

(iii) Current cash positions as against cash requirements for the

quarter.

SEC. 7. Quorum. — All meetings shall only 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. 8. Executive Director. — There shall be an Executive Director
who shall be appointed by the Board and shall have the rank of a bureau
director, with a fixed term of three (3) years, renewable for another term.

SEC. 9. Executive Committee. — The Board shall create an
Executive Committee who shall be headed by the Executive Director to
determine the number of employees needed to carry out the functions of the
Student Loan Board. The Board shall likewise provide for the qualifications
and compensation of employees in the Executive Committee in accordance
with the existing Civil Service rules and regulations.

The Executive Committee shall exercise the following functions:

a) Recommend the approval of loan applications by the Board;

b) Review, evaluate and assess programs, plans of action and
agenda of the Board;

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

d) Recommend the cancellation or revocation of loans; and

e) Perform such other powers and functions as may be determined

by the Board.


SEC. 10. National Student Loan Fund. — All income earners who
want to be members of the National Student Loan Fund and avail of the
benefits thereof are hereby required to contribute through salary deductions,
to the National Student Loan Fund. Such monthly contribution shall be
based on the NEDA income brackets.

All monthly contributions shall be deposited by the Board in the
Development Bank of the Philippines (DBP) under the name of the National
Students Loan Fund.

For the purpose of developing the relevant implementing details of the
National Student Loan Program, the Board shall use as principal reference
the Socialized Tuition Fee Assistance Program (STFAP) of the University of
the Philippines.

SEC. 11. Income Brackets. — The National Economic Development
Authority (NEDA) income brackets of wage eamers shall be the basis of
contributions to the National Student Loan Fund. The contribution structure
shall be progressive from a minimum of one-half percent of individual
income bracket to a maximum of four percent of individual income bracket.

SEC. 12. Beneficiary Loan Amount. — The loan available to a
scholar as beneficiary of an income earner who is a member of the National
Student Loan Fund shall be subject to the following terms and conditions:

a. Availability - Loans shall be available only for undergraduate
degree courses. This program shall not cover post graduate courses.

b. Loan Size - Loan amount shall be equivalent to the prevailing
cost per academic unit at the University of the Philippines multiplied by
eighteen (18) academic units.

G Loan Repayment - Loans shall carry an annual interest rate of
fifteen percent (15%) payable over five (5) years commencing on the first
year after graduation of the scholar. Loan amortization computation shall
use the Diminishing Method. Amortizations shall be deductible from the
salary of income earners as members or from the salary of employed
graduate scholars. It may also be paid directly to the fund in case of self-
employed graduate scholars.

d. Application - Loans shall be applicable to the school of choice

of the designated beneficiary as scholar, to cover tuition and living


allowance. Amounts in excess of the loan needed to cover the scholar's
needs have to be derived from other sources.

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

SEC. 13. Investment Portfolio. - Monies representing contributions
to the Student Loan Fund shall be placed in an Investment Portfolio Fund.
The interest to be derived out the investment portfolio shall be used to fund
all scholarships for qualified scholars in academic institutions of their
choice: Provided, That such educational institutions are duly accredited by
the DepEd and CHED and are included in a list of qualified tertiary
educational institutions prepared by the Board for this purpose.

SEC. 14. Loan Repayments. ~ The heads of the GSIS, the SSS and
the POEA are hereby directed to closely coordinate with the Board to
determine the occupational status of borrowers for purposes of loan
repayments to the fund.

SEC. 15. Tax Deductibility. — All contributions made to the Fund
shall be deductible from the taxable personal income. All loan repayments
of graduate beneficiaries shall likewise be deductible from the taxable
personal income.

SEC. 16. Implementing Rules and Regulations. — The Department
of Education and the Commission on Higher Education shall, within six (6)
months from the effectivity of this Act, issue the necessary rules and
regulations to carry out the objectives of this Act.

SEC. 17. Appropriations. — The initial amount of Fifty Million
Pesos (P50,000,000.00) is hereby appropriated for the effective
implementation of this Act. Thereafter, such amount as may be necessary
for the continued operations of the Board shall be included in the annual

General Appropriations Act.



SEC. 18. 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. 19. Repealing Clause. — All laws, executive orders,
presidential decrees, rules and regulations or parts thereof inconsistent with
any provisions of this Act are hereby repealed or amended accordingly.

SEC. 20. Effectivity. - This Act shall take effect fifteen (15) days
following its publication in the Official Gazette or in any two (2) national
newspapers of general circulation.

Approved,