FOURTEENTH CONGRESS OF THE REPUBLIC) 
) 
7 $!lJI. -.z ; y :  
: 
OF THE PHILIPPINES 
First Regular Session 
1 
S E N A T E  
S. 8. No. 
573 
Introduced by Sen. Jinggoy Ejercito Estrada 
EXPLANATORY NOTE 
This bill seeks to create a National Student Loan Board to implement a National 
Student Loan Program for the poor, define its powers and functions and appropriate 
the necessary funds. 
The importance of providing access to higher education for the poor cannot be 
overemphasized. In the Philippines, only a little over 11% of our work force has a 
college education. Of the college age population, less than 50% are enrolled in tertiary 
educational institutions and about 70% are living below the poverty line. 
Under this proposed measure, the cross-subsidy program implemented by the 
University of the Philippines (UP.) will be replicated on a nationwide scale. As such, 
under this proposed measure, a mandatory monthly contributions shall be made by 
persons within specific income brackets and that such fund collected shall go into the 
national student loan fund. These contributions will be graduated according to income 
bracket. Using the 1995 data from the Philippine Statistical Yearbook and the targeted 
contribution rates, annual contributions that will be collected under this proposed 
measure will amount to about Php 6 billion pesos a year. 
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 the next economic 
tiger of Asia by educating the less fortunate of our Filipino people. 
In view of the foregoing, the passage of this bill is earnestly requested. 
EJERCITO ESTRADA 
Senator 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
S.B.No. 
573 
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~ 
. .  fi 
Introduced by Sen. Jinggoy Ejercito Estrada 
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 2007." 
SEC. 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. 
SEC. 3. 
Definition of Terns. - 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; 
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 Iskolurs as hereinafter defined; 
b) 


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; 
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; 
Iskolur Brackets - hereinafter called "brackets" shall refer to a beneficiary 
classification system wherein Isblur ng Buyulan shall be ranked according to 
the annual family income and/or academic performance in an 
immediately previous school term. 
d) 
e) 
f) 
SEC. 4. 
Composition of the Board. - The National Student Loan Board 
created under this Act shall be composed of the following members: 
1) 
Clzairperson - The Secretary of the Department of Education (DepEd), or 
hisjher duly designated representative who should be an Undersecretary, 
shall be the Chairperson of the National Student Loan Board. The 
Secretary of the DECS shall receive per diems to be paid for attendance in 
regular and emergency meetings called by the Board. 
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. 
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 
2) 
3) 


Executive DirectOr shall serve a term of three (3) years and can be re- 
appointed for another one (1) term. 
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. 
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-oficio members of 
the board shall have no power to vote. 
4) 
5) 
SEC. 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; 
To promulgate the necessary guidelines, rules or regulations for the 
lending of funds for education to the poor; 
To appoint the necessary staff and/or employees for the National Student 
Loan Board; 
To allocate and disburse funds for the education of the poor; 
To cancel, suspend, or revoke loans in cases of deceit, fraud or cheating of 
any kind on the part of the borrower; 
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; 
b) 
c) 
d) 
e) 
f )  


g) 
To appoint an investment manager for the Investment Portfolio, should it 
be deemed necessary: Provided, That such appointment shouId not exceed 
three (3) years, and subject to performance review prior to renewal; 
To report to the Office of the President on a monthly basis; and 
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. 
h) 
i) 
SEC. 6. 
Meetings of the Boaud. - 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. 
SEC. 7. 
Quorum for National Student Loan Board Meetings. - All regular 
and emergency meetings shall only be convened with a quorum of at least fifty 
percenturn (50%) plus one (1) of the regular Board Members. All meetings convened 
without the said quorum shall be deemed null and void. 
SEC, 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: 
To recommend the approval of loan applications by the Board; 
To review, evaluate and assess programs, plans of action and/or agenda 
of the Board; 
To review, evaluate and assess the academic standing of loan borrowers; 
To implement the orders, rules, regulations and guidelines passed by the 
Board; 
To conduct annual spot and random inspections on borrowers; 
To conduct studies and researches for the improvement of educational 
services for the poor; 
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; 
To recommend the cancellation or revocation of loans; and 
To perform such other powers and functions as may be determined by the 
Board. 
h) 
i) 
SEC. 9. 
Student Loan Board Sta#/ 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. 
SEC. 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. 
SEC. 11. 
Contributions. - AI1 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. 
SEC. 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 Iskolars in academic institutions of their choice: 
Provided, That such 
educational institutions are duly accredited by the DECS and are included in a list of 
qualified tertiary educational institutions prepared by the Board for this purpose. 
SEC. 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 %% of individual 
income bracket to a maximum of 4% of individual income bracket. 
SEC. 14. 
Beneficiary Loan Amount. - The loan available to an Iskolar shall be 
semestral, and shall be subject to the following terms and conditions: 
Availability - lskolar ng Bayan loans shall be available only for 
undergraduate degree courses. 
This program shall not cover 
postgraduate courses. 
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. 
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 
Iskolar. 
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 Iskolars. 
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 Iskolar 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. 
SEC. 15. 
Mandatory Contributions. - All income earners as determined 
under Section 9 above are hereby required to contribute to the Fund. Such mandatory 
contribution shall be based on NEDA income brackets. 


SEC. 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. 
SEC. 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. 
SEC. 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. 
SEC. 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. 
SEC. 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. 
SEC. 21. 
Effectivity CIause. - 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,