Republic of the Philippines 
SENATE OF THE PHILIPPINES 
Pasay City 
SIXTEENTH CONGRESS 
First Regular Session 
S. B. No. 2169 
INTRODUCED BY SENATOR SONNY ANGARA 
'14 
liAR 11 P 2 :14 
IU:CEIVED HY:._ r 
AN ACT ESTABLISHING A VOLUNTARY STUDENT LOAN PROGRAM BY PRIVATE 
BANKS, PROVIDING INCENTIVES THEREFOR AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
This bill is a counterpart of House Bill 3617 entitled, "An Act Establishing a Voluntary 
Student Loan Program by Banks and Government Financial Institutions, Providing Incentives 
Therefore and for Other Purposes," also known as the "Voluntary Student Loan Program Act," 
principally authored in the Lower House by Congressman Roman T. Romulo. This author agrees 
with the intent of the bill to encourage banks and government financial institutions to help in 
providing our students the needed financial assistance that would enable them to obtain post-
secondary and college and post-graduate degrees. 
Despite the National Government's mandate to make education accessible to all Filipinos, 
the reality is that many impoverished Filipino families remain unable to send their children to 
school. Even with the government's existing programs, it is apparent that available financial 
assistance to students are not enough to cater to those who are in need. 
In a recent study commissioned by the Commission on Higher Education (CHED) on the 
different student financial assistance programs being implemented by the government, it showed 
that these programs have only assisted around 60,000 students in 2011 or about 2% of 
approximately 2.7 million students, indicating a minimal coverage in terms of number of students 
accommodated. 
The proposed bill aims to assist eligible students to obtain post-secondary technical-
vocational certificates or diplomas, and college and post-graduate degrees, by encouraging banks 
and government financial institutions to allot a portion of their loanable funds for loans available 
to students, to be repaid in instalments after the student graduates. Participating banks, in turn, 
are entitled to certain incentives under the bill. This is envisioned to complement the existing 
financial assistance programs being implemented by the government, to help meet our students' 
needs. 
In view of the foregoing, approval of this bill is earnestly sought. 


Senate of the Philippines 
Sixteenth Congress 
First Regular Session 
S.B. No. 
2169 
INTRODUCED BY SENATOR SONNY M. ANGARA 
Senate 
. (til~ ... f,Ilt.>rft"'·'U 
'14 
MAR 11 
P 2 :14 
RECEIVED BY: .. t 
AN ACT ESTABLISHING A VOLUNTARY STUDENT LOAN PROGRAM BY PRIVATE 
BANKS, PROVIDING INCENTIVES THEREFOR AND FOR OTHER PURPOSES 
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SECTION 1. Short Title. - This Act shall be known as the "Voluntary Student Loan 
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Program Act". 
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SEC. 2. Declaration of Policy. - It shall be a policy objective of the State to assist 
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eligible students to obtain post-secondary technical vocational certificates or diplomas 
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from technical-vocational institutes and college and post-graduate degrees from higher 
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education institutions by encouraging banks and government financial institutions to lend 
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money to eligible students, to be repaid in instalments after the student graduates or 
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leaves the educational institutions. 
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SEC. 3. Definition of Terms. - For purposes of this Act, the following terms shall 
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mean: 
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a) CHED refers to the Commission on Higher Education. 
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b) Eligible student refers to a student who meets the admission requirements of a 
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technical-vocational institute (TVI) or higher education institution (HEI) and has been 
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accepted for enrolment in a post-secondary TVI as a non-degree student or in an HEI 
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as an undergraduate or post-graduate student. 
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c) Higher Education refers to college and graduate education or training in an educational 
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program leading to a degree offered in HEls. It is also known as tertiary education. 
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d) Higher education institution (HEI) refers to an educational institution that is legally 
authorized to offer a program of education leading to the conferment of a degree. 
e) Lender refers to a private bank which provides loans to student borrowers pursuant to 
this Act. 
f) 
Post-secondary education refers to education and training in non-degree vocational 
and technical courses offered in post-secondary TVls. 
g) Priority eligible student refers to an eligible student who is an immediate member of a 
family where no other immediate member of such family is enrolled in or has 
completed post-secondary or higher education at the time of the loan application. 
h) Private banks refer to commercial, rural, thrift, cooperative and other types of banks 
where the majority of the capital stocks are owned and operated by the private sector 
and which are registered and directly supervised by the Bangko Sentral ng Pilipinas 
(BSP). 
i) 
Student-borrower refers to an eligible student with a loan under this Act. 
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j) 
Technical-vocational institute refers to a technical-vocational education and training 
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institution accredited by the Technical Education and Skills Development Authority 
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(TESDA) which offers any non-degree program at the post-secondary educational 
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level oriented towards skills proficiency leading to a certificate or diploma in 
preparation for a particular occupation or group of middle-level occupations. 
k) TESDA refers to the Technical Education and Skills Development Authority as 
established under Republic Act No. 7796, otherwise known as the "TESDA Act of 
1994". 


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SEC. 4. Registration of Student Loan Program Under this Act. - Private banks 
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participating in the student loan program may allot a portion of their loanable funds for loan 
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to eligible students, Such banks participating in the program may be entitled to avail 
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themselves of the incentives under this Act by the registration of their student loan program 
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with the BSP, 
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In addition, the BSP shall provide other incentives which may be nonmonetary to 
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private banks participating in the voluntary student loan program under this Act. 
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SEC. 5. Loan Coverage. - The loan may either cover the entire or part of the cost 
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of the program offered by the TVI or HEI including, but not limited to, tuition and 
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miscellaneous fees: Provided, That adjustments shall be made in case of increase in 
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tuition and miscellaneous fees. It shall likewise include an amount for the cost of 
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attendance, covering necessary expenses of the student for books, food, transportation, 
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board and lodging and a reasonable allowance for projects and other school requirements. 
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SEC. 6. Student-Borrower Number. - For proper implementation of this act and 
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to better facilitate the collection of the loan, the Social Security System (SSS) and the 
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Government Service Insurance System (GSIS) shall issue, upon application, an SSS or 
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GSIS number to the student-borrower. The number so issued shall serve as the 
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permanent SSS or GSIS number of the student-borrower in case of future employment 
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with the private or government sector. 
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SEC. 7. Qualification Requirements of Student-Borrower. -
Any student-
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borrower eligible under this Act shall have the following entry requirements: 
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a, General entry requirements: 
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1, Must be a Filipino Citizen; 
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2, Currently enrolled or intends to enrol or re-enroll in any of the priority 
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courses to be determined by the CHED or TESDA; 


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3. Has parents or guardians who are GSIS or SSS members or SSS prior 
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registrants; and 
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4. Does not currently enjoy any scholarship or study grant; 
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b. Additional specific entry requirement for priority eligible student: 
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1. Barangay certification that no other immediate family member of the 
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student is enrolled or has completed a post-secondary higher education at 
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the time of the loan application; or 
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2. Notarized self-certification that no other immediate family member of the 
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student is enrolled or has completed a post-secondary higher education at , 
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the time of the loan application; and 
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c. Other requirements as may be determined by banks. 
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SEC. 8. Loan Application. - Any eligible stUdent borrower may file the loan 
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application with a participating private bank. A loan application shall include, among 
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others: 
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a. The student SSS or GSIS number; 
b .. The taxpayer's identification number (TIN) of the student, in case one 
is employed; 
c. The list of expenses which shall include the total tuition fees for the 
entire period of attendance to complete the student's course or degree, 
with a necessary allowance for any increase that the TVI or HEI may 
rightfully make and the other miscellaneous expenses certified by the 
educational institution; 
d. A reasonable approximation of the cost of attendance of the student in 
the chosen TVI or HEI which shall include, among others, the cost of 
books, food, board, lodging and transportation expenses; 
e. A statement of the student-borrower on the preferred employer in the 
future, whether with the private or public sector; and 
f. 
All other requirements that the partiCipating private bank may impose 
for the proper identification of the student. 


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SEC. 9. Loan Disbursement. - Upon approval of the loan application, the loan shall be 
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disbursed in tranches every semester or trimester, or any other term of attendance, depending 
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on the academic calendar adopted by the TVI or HEI. Any succeeding tranche shall be disbursed 
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on the condition that the student-borrower completes the term previously enrolled in as certified 
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by the TVI or HEI. The tuition and miscellaneous fees payable to the educational institution shall 
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be disbursed or be made payable directly to the TVI or HE!. 
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SEC. 10. Withholding of Second or Subsequent Disbursement. - A lender who 
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receives information that the student-borrower has ceased to be enrolled before the disbursement 
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of the second or any succeeding instalment shall withhold such disbursement. Any disbursement 
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which is so withheld shall be credited to the student-borrower's loan and treated as a prepayment 
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thereon. 
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SEC. 11, Interest Rate and the Five Percent (5%) additional Interest as Allowable 
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Deduction. - For any loan procured under this Act, lenders shall charge an interest based on the 
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prevailing ninety-one (91) Treasury Bill rate at the time of release of the loan to be paid by the 
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student-borrower, and an additional interest of three percent (3%) and in case of loans to priority 
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eligible students an additional interest of five percent (5%), which shall not be payable by the 
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student but may be claimed by the lender as a deduction from income: Provided, That the 
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additional five percent (5%) interest shall be allowed as a deduction from gross income for the 
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same taxable year that the additional interest is due: Provided, further, That the total amount of 
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the additional interest and the claimed tax deduction shall be subject to proper documentation 
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and to the provisions of the National Internal Revenue Code, as amended. 
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SEC. 12. Terms and Conditions of Loans. - Any loan agreement shall: 
a. Be eVidenced by a note or other written instrument which provides for 
repayment of the principal amount of the loan, together with the interest 
thereon, in equal instalments or when the borrower so requests, in graduated 
periodic instalments, payable quarterly, bimonthly or monthly at the option of 


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the student-borrower, over a period beginning not earlier than twenty-four (24) 
months after the student-borrower ceases attending the TVI or HEI, and ending 
eight (8) years after such date, except that such period may begin earlier than 
twenty-four (24) months upon the request of the student-borrower; 
b. Include a provision for acceleration of repayment of the whole or any part of 
the loan, at the option of the student; and 
c. 
Include a provision for preferential employment of the student-borrower in 
private banks or in the government upon graduation. 
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SEC. 13. Collection. - A lender shall file a request with GSIS or SSS to collect the 
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repayment of the loan through its system of salary deduction and withholding. It may likewise 
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enter into an arrangement with the Philippine Overseas Employment Administration (POEA) and 
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the Overseas Workers Welfare Administration (OWWA) to ensure collection from the student-
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borrower seeking employment abroad. 
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SEC. 14. Program Administration. - An interagency team composed of the CHED, 
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TESDA, BSP, the Bankers Association of the Philippines (BAP), the Chamber of Thrift Banks 
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(CTB), the Credit Information Corporation (CIC) and the Rural Bankers Association of the 
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Philippines (RBAP) shall be jointly responsible for policy guidance and direction, monitoring and 
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evaluation of the student assistance program under this Act. The CHED and the TESDA shall act 
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as chair and co-chair, respectively, of the said team. 
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SEC. 15. Implementing Rules and Regulations. - The CHED, TESDA, the Department 
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of Finance (DOF) and the BSP, in consultation with the SSS, GSIS, the Bureau of Internal revenue 
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(BIR), the National Bureau of Investigation (NBI), the POEA, CIC, the Coordinating Council of 
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Private Educational Associations (COCOPEA) and the Philippine Association of State Universities 
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and Colleges (PASUC), shall promulgate such rules and regulations necessary for the proper 
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implementation of this Act within ninety (90) days from its effectivity. 
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SEC. 16. Separability Clause. If any provision of this Act is declared unconstitutional or 
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invalid, the other sections or provisions not otherwise affected shall continue to be in full force 
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and effect. 
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SEC. 17. Effectivity Clause. This Act shall take effect fifteen (15) days after its publication 
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in at least two (2) newspapers of general circulation. 
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Approved,