Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

2876

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO.

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

EXPLANATORY NOTE

Easy access to higher education opportunities remains elusive especially for the
poor. Enough emphasis has been given to this fact but a lot remains to be done since
education is considered a strategic key out of poverty. In the country, a little over 11%
of the labor force has a college education, Moreover, in our college-age population,
less than 50% are enrolled in tertiary educational institutions and about 70% live below
the poverty line

This proposed measure, therefore, seeks to create a National Student Loan
Board which will implement a National Student Loan Program for the poor, define its
powers and functions and appropriate the necessary funds.

Under the bill, the University of the Philippines (UP) will be implementing a cross-
subsidy program which will be replicated nationwide. As a result, mandatory monthly
contributions shall be made by persons within specific income brackets and that such a
fund collected shall go into the national student loan fund. These contributions will be
graduated according to income brackets.


There is no doubt on the need for such a national student loan program to assist
the poor and needy and provide them access to tertiary education, Empowering them
with decent education will give them more opportunities and help alleviate their
impoverished lives. If we wish to become the next economic tiger of Asia, we need to
educate our country’s less-fortunate and make them major contributors in Philippine
society and in nation building

Given the paramount importance of this proposal, its expeditious passage into
law is earnestly sought.

Vi
DIOSDADO AL ARROYO GLORIA MACAPAGAL ARROYO
Second District, Camarines Sur Second District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House BillNo.__ 28.76

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

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 2013."

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 "/skolar" 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 the "Fund" shall refer to a
cross-subsidy benefit fund to be collected by the National Government and lent
to qualified /skolars as hereinafter defined;

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;

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 /skolar 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) Chairperson — 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 receive a monthly compensation
equivalent to salary grade 28. 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,


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.

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 meetings 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 to 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 of the Fund, 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 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.

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
percentum (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;

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

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

1) 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 (DBP) 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 /skolars in academic institutions of their choice: Provided, That
such educational institutions are duly accredited by the DepED and 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
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 1/2% 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 semestral, 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 University of the Philippines multiplied by twenty one (21)
academic units.

c) 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 /skolar.
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.


d) Application — the loan shall be applicable to the school of choice of the /skolar,
to cover tuition and living allowance. Amounts in excess of the loan needed to
cover the /skolar’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,

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), 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

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 or invalid, the other section or provision, 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,