Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

Fifteenth Congress
First Regular Session

HOUSE BILL NO. 670

Authored by Hon. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

It is well provided in the 1987 Philippine Constitution under
Article II, Section 17 which states that “The State shall give priority
to education, science and technology, arts, culture, and sports to
foster patriotism and nationalism, accelerate social progress, and
promote total human liberation and development.”

Lamentably, education has not been getting the budgetary
allocation it truly deserves. The yearly increase in tuition and
matriculation fees in most colleges and universities only reduces the
number of students able to finish their studies and pursue their
dreams,

Unless the Government addresses this problem, this country
cannot be able to harness its human resources for national
industrialization and development. Development and progress
requires highly-skilled and well-trained workers and competent
professionals.

This bill seeks to create a National Student Loan Board to
implement a National Student Loan Program for the poor so that the
country could be able to build a vast resource of highly-skilled
workers and competent professionals.

Under this measure, the cross-subsidy program implemented
by the University of the Philippines like the Socialized Tuition Fee
Assistance program will be replicated on a nationwide scale. As such,

a mandatory contribution shall be made by persons within specific


income brackets and that such fund collected shall go into national
student loan fund. These contributions will be graduated according to

income.

Accordingly, the swift passage of this bill is earnestly sought.

JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

ee 670

HOUSE BILL No.

Authored by Hon. JOSEPH VICTOR G. EJERCITO

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 2010.”

SECTION 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.

SECTION 3. Definition of Terms. - 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;

b) National Student Loan Fund - hereinafter called “Fund” shall

refer to a cross-subsidy benefit funds to be collected by the

National Government and lent to qualified ISKOLARS as
hereinafter defined;


c) National Student Loan Board - hereinafter called “Student
loan Board” shall refer to a governing body under the Office

of the President tasked to implement the provisions of this

Act; 7

d) 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;

e) 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;
f

ISKOLAR Brackets — hereinafter called “brackets” shall refer
to a beneficiary classification system wherein ISKOLAR NG
BAYAN shall be ranked according to the annual family
income and/or academic performance in an immediately
previous school term.

SECTION 4. Composition of the Board. - The National
Student Loan Board created under this Act shall be composed of the
following members:

1) Chairman - the Secretary of the Department of Education
(DepEd), or his/her duly designated representative who
should be an Undersecretary, shall be the Chairperson of the
National Student loan Board. The Secretary of the DepEd
shall receive per diems to be paid for attendance in regular
and emergency meetings called by the Board;

2) 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.

3) 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 serve a
term of three (3) years and can be reappointed for another
one (1) term.

4) Working Board Members — There shall be ten (10) Working
Board members, eight (8) members of whom shall come
from the State Universities and Colleges, ad 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.

5) 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 meeting called by the Board. The ex-officio
members of the Board shall have no power to vote.

SECTION 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 of the Fund;

b) To promulgate the necessary guidelines, rules or regulations
for the lending of funds for education to the poor;

c) To appoint the necessary staff and/or employees for the
National Student Loan Board;

d) To allocate and disburse funds for the education of the poor;

e) To cancel, suspend, or revoke loans in cases of deceit, fraud
or cheating of any kind on the part of the borrower;


f) To be the trustees for the Investment Portfolio, which shall
be created out of its excess over semestral operating and
lending requirements;

g) To appoint an Investment manager for the Investment
Portfolio, should it be deemed necessary; Provided, that
such appointment should not exceed three (3) years, and
subject to performance review prior to renewal;

h) To report to the Office of the President on a monthly basis;
and

i) 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.

SECTION 6. Meetings of the Board. ~ The National Student

Loan Board shall hold twelve (12) regular board meetings every year
to be held every first Monday of the month. The Chairman of the
Board shall be the presiding officer. In the absence of the
Chairperson, the Vice-Chairperson of the Board shall automatically
takeover.

SECTION 7. Quorum for National Student Loan Board
Meetings. - All regular and emergency meetings shall only be
convened with a quorum of at least fifty per centum (50%) plus one
(1) of the regular Board Members. All meetings convened without the
said quorum shall be deemed null and void.

SECTION 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:

a) To recommend the approval of loan applications by the

Board;

b) To review, evaluate and assess programs, plans of action
and/or agenda of the Board;

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


d) To implement the orders, rules, regulations and guidelines
passed by the Board;

e) To conduct annual spot and random inspections on
borrowers;

f) To conduct studies and researches for the improvement of
educational services for the poor;

g) 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;

h) To appoint the necessary staff and/or employees for the
Executive Committee of the National Student Loan Board;

i) To recommend the cancellation or revocation of loans; and

j) To perform such other powers and functions as may be
determined by the Board.

SECTION 9. Student Loan Board Staff 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.

SECTION 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.

SECTION 11. Contributions. - All monthly contributions
made to the Fund shall be deposited by the Board in the
Development Bank of the Philippines under the name of the National
Student Loan Fund.

SECTION 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 DepEd are included in a list of qualified tertiary
educational institutions prepared by the Board for this purpose.

SECTION 13. Contributor Income Bracket. ~ the Director-
General of the NEDA is hereby directed to assist the Board in
determining 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 ¥%2% of individual income bracket to a maximum of 4% of
individual income bracket.

SECTION 14. Beneficiary Loan Amount. ~ The loan
available to an ISKOLAR shall be semetral, and shall be subject to the
following terms and conditions:

a) Availability - ISKOLAR NG BAYAN loans shall be available

only for undergraduate degree courses. This program shall

not cover postgraduate courses;
b

Loan size - loan amount shall be equivalent to the prevailing
cost per academic unit at the Polytechnic University of the
Philippines (PUP) 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 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 ISKOLARS;

d) 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;

e) Drawdown - Upon approval of a loan, an amount equivalent

to the tuition of the ISKOLAR 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
semestral system, or four (4) equal monthly installments
starting the first month of the trimester in the case of
schools using trimestral system.

SECTION 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.

SECTION 16. Loan Repayments. ~ The Chairpersons of the
Government Service Insurance System (GSIS), 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.

SECTION 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.

SECTION 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.

SECTION 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.

SECTION 20. Separability Clause. - If, for any reason, any
section or provision of this Act shall be held unconstitutional, the
other section or provisions not otherwise affected shall remain valid.

SECTION 21. Effectivity Clause. - 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,