REGISTRATION UNIT
BILLS AND INDEX SERVICE
Republic of the Philippines _
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Seventeenth Congress
First Regular Session

House Bill No.

Introduced by Honorable Roy M. Loyola

EXPLANATORY NOTE

At present, there could be no denying the fact that capable and
deserving students are prevented from pursuing post-secondary education due
to their dire financial situation. It is true that the State is desperately trying to
address the situation, but with limited scope and coverage of existing state
scholarships and grants, the results have lots to be desired from. While
included in the term “financial aid’, higher education loans differ from
scholarships and grants in the sense that the former must be paid back by the
student. Therefore, in view of the limited funds available for the State to
support its program of educational grants, scholarships and dole-outs, it is
apparent that educational loan is the more viable solution to the problem

The first legislation on student loans was approved as early as 1969
when the Student Loan Fund Authority was set up under the then Department
of Education and Culture. However, it failed to live up to expectations and was
eventually abolished in 1976.

On 13 May 1976, a “Study Now Pay Later Plan’ (SNPL) was instituted
by Presidential Decree No. 932. Thereafter, it was succeeded by Republic Act
No. 6728 otherwise known as “Government Assistance to Students and
Teachers in Private Education Act’, as amended by Republic Act No. 8545,
otherwise known as "The Expanded Government Assistance to Students and
Teachers in Private Education Act.”

Sadly, these old SNPL programs of the State were marred with serious
flaws, namely, negligible loan amounts, low coverage, very limited slots and
low repayment rates.

This bill was originally filed during the first regular session of the
Fifteenth Congress. It seeks to address the shortcomings of the old SNPL Pian
by rationalizing its provisions. Initially, within five (S) years from its approval
the coverage is made limited to cover only those enrolled or intending to enroll


Technical vocational education and training certified by TESDA as priority
Thereafter, it will be made to apply to all technical vocational education and
training and to all degree courses, The loanable amounts, so as to make on
wPpact, will be increased to an amount not less than seventy-five percent (75%)
of the student-borrower's tuition. An efficient system of collection is alee
enjoined. The Government Security Insurance Service (GSIS) and the Soci’
Security System (SSS) are mandated to act as collection agents for the CHED
and TESDA. For this purpose, the GSIS and SSS are given the power to
assess students-borrowers of their monthly loan repayment amortizations and
the concemed employers are given the authority to automatically withhold snd
deduct said loan repayments from the salaries of student-borrowars

Through a dynamic, efficient and effective student loan program wherein
qualified students will be able to finance their tertiary education through a loan
from the State and Pay their indebtedness at a later date when they are in a
Position to do so, that is, when they already have jobs, the State could finally
comply with its elusive Constitutional mandate of protecting and promoting the
right of all its citizens to quality education

In light of the foregoing, | earnestly urge my esteemed colleagues in the
House of Representatives to join me in seeking immediate approval of this Bill

QL

M. LOYOLA


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

Seventeenth Congress
‘First Regular Session

1195

House Bill No,

Introduced by Honorable Roy M, Loyola

AN ACT INSTITUTING A COMPREHENSIVE STUDENT LOAN PROGRAM

FOR ALL POST-SECONDARY EDUCATION ON A “STUDY NOW
PAYE LATER” SCHEME AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philiopines in

Congress assembled:

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SECTION 1. SHORT TITLE. - This Act shall be known as the
"Study Now Pay Later Act of 2016”.

SECTION 2. DECLARATION OF POLICIES AND
OBJECTIVES. - The State is mandated by the Constitution to protect
and promote the right of all its citizens to quality education at all levels.
make such education accessible to all, an maintain a system of
Scholarship grants, student loan programs, subsidies and other
incentives. In view of the limited funds available for scholarship grants
scholarships and dole outs, the State turn to a comprehensive loan
Program as a more viable solution to providing its citizen with equal
Opportunity to higher education. While it is true that “Study Now Pay
Later” programs have been implemented by the State in the past, the
‘same proved to be ineffective, inefficient and unsuccessful in fulfilling its
Purpose. Thus, the need to rationalize, to make it more adaptable to the
Present situation, be increasing its coverage, instituting a more efficient


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loan collection system and simplify its operation,

SECTION 3, DEFINITION OF TERMS. - For purposes of this,
Act, the following terms shall mean

1)

3)

4)

Study Now Pay Later Program (SNPLP) _ refers to the
oan facility established by the government but deserving
student-borrowers enrolled in or intending to enroll in any
post-secondary education

Student-borrower refers to a person enrolled in or intends
to enroll in post-secondary education who qualifies to draw
from the SNPLP established in this Act to support his/her
post-education

Post-secondary Education refers to any education
training and/or instruction from any. institution uly
fecognized and/or accredited _ by the Commission on
Higher Education (CHED) and Technical Education and
Skills Development Authority (TESDA), the completion of
which are attested by a diploma or certificate issued by or
with the permission and authority of CHED or TESDA
respectively

Degree Course refers to formal education offered by
institutions of higher learning recognized by CHED.

Technical Vocational Education and Training _ refers to
non-degree vocational and technical short courses offered
by TESDA or offered by sitnilar institutions accredited and/
or recognized by TESDA,


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SECTION 4. ADMINISTRATION OF THE STUDY NOW PAY
LATER PROGRAM. - — CHED shall have administrative control and
Supervision over loans granted to student-borrowers enrolled in degree
courses. TESDA shall have administrative control and supervision over
loans granted to student-borrowers enrolled in technical vocational
education and training, To accomplish the foregoing task, CHED and
TESDA are hereby granted the following powers and functions

a) Formulate policies, standards and guidelines necessary for
the implementation of this Act;

b) Develop an efficient system of disbursement and collection
of payments of loans granted under this Act, including but
Not limited to entering into agreements with the
Government Service Insurance System (GSIS), Social
Security System (SSS), private and public banks and
banking intermediaries, and other government financial
institutions;

¢) Issue rules and regulations necessary to carry-out the
Provisions of this Act;

d) Exercise such other powers and functions reasonably
necessary for the proper implementation of this Act

SECTION 5. QUALIFICATION OF STUDENT-BORROWERS, -
Any Filipino citizen who possesses the qualifications herein
Provided are eligible to draw a loan under the SNPLP:

1 Not more than thirty (30) years old at the time of
application for the loan;

2, Must be enrolled in or must have complied with all the
enrollment and admission requirements of the college or
university he/she intends to enroll in;


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3. Must have a rating of 75% or above in the National
Secondary Achievement Test (NSAT) or other equivalent
tests;

4. The parents or guardians have a gross income of not
more than One hundred Eighty Thousand Pesos
(P 180,000.00);

5, Must not be enjoying any other scholarships or study

grant,
6. Must not have been convicted of any crime involving moral
turpitude:
7, If the student-borrower is availing of a student joan for the

second time or oftener, he must sufficiently show that
he/she passed all his subjects and have a weighted
average of 2.5 or higher, or its equivalent, in the semester
immediately preceding his/her loan application; and

8. Must have attended the orientation program called for the
purpose.

SECTION 6. COVERAGE. - Within five (5) years from
effectivity of this Act, loans granted to student-borrower shall be limited
to technical vocational education and training declared by TESDA as
Priority. Thereafter, loans granted to student-borrowers shall be made
available to all technical and vocational education and trainings, and to
all degree courses in all institutions of higher learning. This Act shall not
cover post-graduate courses.

SECTION 7. AMOUNT OF LOAN. - CHED and TESDA
shall determine the maximum amount a student-borrower can avail
under this Act, which may cover tuition fees, and other educational
expenses such as, but not limited to books, subsistence. board and


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lodging. Provided, loans for tuition fees shall in no case fall below
Seventy-five percent (75%). Provided further, loans granted for payment
Of tuition fees shall be directly payable to the schoo! concerned

SECTION 8 TERMS, INTEREST RATES, REPAYMENT AND
OTHERS. - CHED and TESDA shall determine the interest rate, terms
of payment and other conditions of payment of the loans under their
respective control and supervision, subject to the following

1) Voluntary repayments may start anytime the student-
borrower wants to pay;

2) Interest rate shall in no case be more than six percent (6%)
per annum;

3) Loan repayments shall commence not earlier than two (2)
years after the student-borrower graduates from the course
he/she took and is able to land a job;

4) Loans granted to student-borrowers shall be payable in
‘one hundred twenty (120) equal monthly installments or
ten (10) years, Provided, loan amortizations shall in no
case be more than thirty percent (30%) of the student-
borrower's monthly salary. Provided further, CHED and
TESDA are hereby authorized to extend the term in case
the monthly salary of the student-borrower is inadequate to
Pay his loan within the ten (10) year period taking into
consideration the thirty percent (30%) monthly amortizetion
cap. Provided finally, the student-borrower shall not be
made to pay monthly amortizations while he/she is
unemployed;

5) For purposes of this Act, CHED and TESDA shall enter
into an agreement with the SSS and GSIS for it to act as


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collection agent. The employer of the student-borrower is
hereby authorized to automatically deduct such
installments due from the student-borrower's salary and
remit the same to the respective accounts of GSIS or SSS,

6) To ensure continued viability of this SNPLP, CHED and
TESDA through the program's Implementing Rules and
Regulations to be issued subsequent hereto, and through
stipulations in the Student Loan Agreement may require
the student-borrower not to depart from the Philippines and
work abroad until his/her loan has been fully settled, The
student-borrower shall be required to submit an
undertaking of such fact as a requirement for the release of
the student loan. Provided, the foregoing notwithstanding,
should the student-borrower stii! desire to work abroad,
he/she shall then be required to fully settle his/her
outstanding obligations for loans granted in this Act,

7) The Department of Labor is hereby mandated to adopt pro-
active, policies, plans and programs to assist the student-
borrower to find employment from within the Philippines

SECTION S, IMPLEMENTING RULES AND REGULATIONS. -

CHED and TESDA respectively, shall within six (6) months from
effectivity of this Act issue the necessary rules and regulations to carry
out the provisions hereof.

SECTION 10. APPROPRIATIONS. - The Amount of One
Billion Pesos (PhP 1,000,000,000.00) out of funds in the National
Treasury not otherwise earmarked for any other purpose are hereby
appropriated to carry out the provisions of this Act. Thereafter, such
sum necessary for its continued operation shall be included in the
annual General Appropriations Act.


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SECTION 11. SEPARABILITY CLAUSE.- if any provision
of this Act is held invalid or unconstitutional, other provisions not affected
thereby shall continue to be in full force and effect,

SECTION 12. REPEALING CLAUSE. - All laws, decrees,
and/or executive orders inconsistent with this Act are hereby repealed
and/or modified accordingly.

SECTION 13, EFFECTIVITY. - This Act shall take effect fifteen
(15) days after its publication in at least two (2) newspapers of general
circulation.

Approved,