FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
Senate Bill No. 
n-' 
INTRODUCED BY HON. MANNY VILLAR 
EXPLANATORY NOTE 
A large portion of Filipinos are poor and unable to access higher education -- 
making them unable to rise above themselves no matter how dedicated and 
industrious they may be simply because they possess only the most rudimentary 
skills. Their very poverty places the education required for higher level skills beyond 
their reach. Access to higher education is the first step towards breaking the 
shackles of poverty. 
This bill seeks to make higher education accessible to the poor .through the 
creation of a National Student Loan Board - an extension on a nationwide basis of 
the cross-subsidy program of the University of the Philippines known as the 
Socialized Tuition and Financial Assistance Program (STFAP). 
Monthly contributions shall be made by persons within specific income 
brackets that will go into a National Students Loan Fund. These contributions will be 
graduated, from one-half percent to four percent of income, according to income 
bracket. 
There is a great need to provide a National Student Loan Program to assist 
the poor and give them access to tertiary education. We will only be able to attain 
our vision of becoming the next economic tiger of Asia by educating our less 
fortunate. 
In vital recognition of the importance of education to nation building, the 
passage of this bill is earnestly requested. 
MANNY VIL AR i 


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FOURTEENTH CONGRESS OF  THE^ 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 
INTRODUCED BY HON. MANNY VILLAR 
AN ACT 
CREATING A NATIONAL STUDENT LOAN BOARD TO FORMULATE AND 
IMPLEMENT A NATIONAL STUDENT LOAN PROGRAM FOR THE 
POOR, AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled: 
SECTION 1. Title. - This Act shall be known as the “National Student Loan 
Program for the Poor Act.” 
SECTION 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 
(c) “National Student Loan Board” refers to a governing body under the Office 
(d) “Board of Directors” refers to the governing body of the Student Loan 
(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” refer to the classification system wherein income 
earners as contributors to the fund are ranked according to annual family 
income. 
collected by the national government and lent to qualified scholars; 
of the President tasked to implement the provisions of this Act; 
Board and shall exercise the powers and duties hereinafter defined. 
SECTION 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 on 


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Commission on Higher Education (CHED) as ex officio Vice-chairman, and the 
following heads of the following government agencies as ex officio members: 
a. 
b. 
C. 
d. 
e. 
f. 
Government Insurance Service System (GSIS); 
Social Security System (SSS); 
Philippine Overseas Employment Administration (POEA); 
National Anti-Poverty Commission (NAPC); 
Presidential Commission on Urban Poor (PCUP); and 
League of Provincial Governors. 
The President of the Philippines shall appoint ten (IO) other members of the 
Board, eight (8) of whom shall be chosen from nominees taken from state 
universities and colleges and two (2) nominees taken from non-governmental 
organization involved in education. 
SECTION 4. Powers and Functions of the Board. - The powers and the 
functions of the Board are as follows: 
(a) Formulate the National Student Loan Program for the Poor within one (1) 
(b) Promulgate the necessary guidelines, rules and regulations for the 
(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 
year after the effectivity of this Act; 
lending of funds for the education of the poor; 
any kind on the part of the borrower; 
(e) Implement the orders, rules, and regulations and guidelines passed by the 
Board pursuant to the National Student Loan Program; 
(9 Conduct annual spot and random inspections on borrowers; 
(9) Conduct studies and researches for the improvement of educational 
(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; 
(j) Act as trustees for the Investment Portfolio fund which shall be created 
(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: 
services for the poor; 
out of its excess over semestral operating and lending requirements; 


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(I) Appoint, every three (3) years, a professional actuary to perform an 
(m) Report to the Office of the President on monthly basis; and 
(n) Perform such other powers and functions as may be necessary by the 
SECTION 5. 
Meetings of the Board. - The Board shall hold monthly 
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. 
actuarial review of the Student Loan Fund; 
President of the Philippines 
A. 
B. 
C. 
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 
At least one meeting shall be devoted to the review and approval of 
individual scholars 
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 position as against cash requirements for the 
quarter. 
SECTION 6. Quorum. - All meetings shall only be convened with a quorum 
of simple majority of the regular board members. All members convened without 
the said quorum shall be deemed null and void. 
SECTION 7. 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. 
SECTION 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 
fix term of three (3) years, renewable for another term. 
SECTION 9. Executive Committee. - The Board shall create an Executive 
Committee who shall be headed by the Executive Director to determine the number 


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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 
(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 maybe determined by the 
Board; 
Board. 
SECTION I O .  National Student Loan Fund. - All income earners as 
determined under Section 10 hereof, who wants 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 and Financial Assistance Program (STFAP) of the University of 
the Philippines. 
SECTION 11. h o m e  Brackets. - National Economic Development Authority 
(NEDA) income brackets of wage earners 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. 
SECTION 12. Beneficiary Loan Amount. -The loan available to a scholar as 
beneficiary of income earner who is a member of the National Student Loan Fund 
shall be subject to the following terms and conditions: 
a. 
b. 
C. 
Availability - Loans shall be available only for undergraduate degree 
courses. This program shall not cover post graduate courses 
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. 
Loan Repayment - Loans shall carry an annual interest rate of 15% 
payable over five (5) years commencing the first year after graduation of 
the scholar. Loan amortization computation shall use the Straight-Line 
Method. Amortization shall be deductible from 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. 


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d. 
e. 
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 to 
have to be derived from other sources. 
Drawdown - Upon the 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 the first month of the semester in the case of schools 
using the first 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 13. lnvestment Portfolio. - Monies representing contributions to 
the Student Loan Fund shall be placed in an investment portfolio fund. The interest 
to be derived out of 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 education institutions prepared by the Board for 
this Purpose. 
SECTION 14. Loan Repayments. - The heads of the GSIS, the SSS, the 
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 15. Tax DeductiMity. -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 16. lmplemenfing Rules and Regulations. - The Department of 
Education and the Commission on Higher Education shall, within six (6) months 
from effectivity of this Act, issue the necessary rules and regulations to carry out the 
objective of this Act. 
SECTION 17. Appropriations. - The initial amount of Ten Million Pesos 
(PlO,OOO,OOO.OO) is hereby appropriated for the effective implementation of this Act. 
Thereafter, such amounts as may be necessary for the continued operations of the 
Board shall be included in the annual General Appropriations Act. 
SECTION 18. Separability Clause. - If for any reason any provision of this 
Act is declared unconstitutional or invalid, parts or provisions of this Act o which are 
not affected shall continue to be in force and effect. 
SECTION 19. 
Repealing Clause. - All laws, executive orders and 
presidential decrees, rules and regulations or parts thereof inconsistent with any 
provisions of this Act are hereby repealed or amended accordingly. 
SECTION 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,