Republic of the Philippines
HNOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONG!
FIRST REGULAR SESSION

HOUSE BILL NO. feo

Introd s HL. Magsaysay

EXPLANATORY NOTE

‘This bill seeks to create a National Student Loan Board to implement a National Student
Loan Program for the poor, define its peers and fimetions 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 (U.P.) 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 shafl 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.

nH

MA. MILAGROS H. MAGSAYSAY
Representative
1 District, Province of Zambales


Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

INGRESS
ESSION

PIPTEENTH C!
PIRST REGUL

_1io

HOUSE BILL NO. -

Introduced by Hon. Rep. Maria Milagros 1. Magsaysay

AN ACT
CREATING A NATIONAL STUDENT LOAN BOARD TO
IMPLEMENT A NATIONAL STUDENT LOAN PROGRAM
FOR THE POOR, DEFINING ITS IMPLEMENTING
GUIDELIN| RULES AND REGULATIONS — AND
APPROPRIATING FUNDS THEREFOR
i

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 2004.”

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,

SE 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

ter
b) National Student Loan Fund ~ hereinafter called the “Fund” shall refer to a cross-

ry education;

subsidy benefit fund to be collected by the National Government and lent to

qualified Iskolars as hereinafier defined;


¢)

National Student Loan Board — hereinafier 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,

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.

SEC. 4. Composition of the Board. ~ The National Student Loan Board created

under this Act

)

4)

shall be composed of the following members:

aA
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 DI
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

Il be the Vice Chairman of the National Student Loan

an Undersecretary,
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 montily compensation
equivalent to salary grade 28. The 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


5)

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-officio members of the board shall have no power to vote.

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
monihly contributions to the Fund;

b) To promulgate the necessary gyidelines, niles 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;

4) Toallocate 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,

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

£) 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 othet powers and functions as may be deemed necessary by the
President of the Philippines, pursuant to the provisions of this Act.

+ SEC. 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.


S @

SEC. 7. Quorum for Natlonal 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.

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:

a) Torecommend the approval of loan applications by the Board;

b) 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;

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

€) —Toconduct annual spot and random inspections on borrowers;

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

2) 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;
h) To recommend the caneellation or revocation of loans; and

may be determined by the Board.

i) To perform such other powers and functions

SEC, 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.

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, — 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.

SEC. 12, Investment Portfolio. — Funds in excess of the annual operating

tequirements 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 educationa

institutions prepared by the Board for this purpose

SEC. 13. Contributor Income Bracket. — The Director-General of the Nationa
Economic and Development Authority (NEDA), is hereby directed to assist the Board ii
determining the income brackets of wage earners who shall be required to make contributions ¢
the Fund within ninety (90) days after the effectivity of this Act. The contribution structure sha

be progressive, from a minimum of 4% of individual income bracket to a maximum of 4% ¢

individual income bracket.

SEC. 14, Beneficiary Loan Amount, ~ ‘The loan available to an Iskolar shall t

semestral, and shall be subject to the following terms and conditions

a) Availability — /skolar ng Bayan loans shall be available only for undergradua
degree courses. This program shall not cover postgraduate courses

b) Loan size ~ loan amount shall be equivalent to the prevailing cost per academ
unit af the University of the Philippities multiplied by twenty one (21) academ
units.

c) Loan repayment — loans shall carry an annual interest rate of 5%, payable ov
five (5) years commencing the first year after the graduation of the Iskolar, Lo

Line Method. Amortizatic

amortization computation shall use the Straight-
shall be deductible from salary in the case of employed graduate Iskolar or pc
directly to the Fund in the case of self-employed graduate of Iskolars.

4) Application — the loan shall be applicable to the school of choice of the Iskolar,

cover tuition and living allowance. Amounts in excess of the loan needed

cover the Iskolar’s needs shail have to be derived from other sources.
) Drawdown — Upon approval of a loan, an amount equivalent to the tuition of
Iskolar can immediately b drawn upon presentation of proof of registrati

Balance can be drawn in five (5) equal monthly installments starting the {


month of the semester in the case of schools using the semestral system, or fo
(4) equal monthly installments starting the first month of the trimester in the ca

of schools using the trimestral system.

SEC. 15. Mandatory Contributions. — All income carners as determined und:
Section 9 above are hereby required to contribute to the Fund. Such mandatory contributio

shall be based on NEDA income brackets.

SEC. 16. Loan Repayments, ~ The Chairpersons of the Government Servic
Insurance System (GSIS), the Social Security System (SSS), the Civil Service Commissio:
(CSC), the Department of Labor and Employment (DOLE) and the Philippine Oversea

Employment Agency (POEA) are hereby directed to closely coordinate with the Board t
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. Al] loan repayments of graduate beneficiaries shall
4

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 s\ all be

included in the annual General \ppropriations Act

SEC. 19. Repealiny Clayse. — 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 uncon:

tutional or invalid, the other section or provision not otherwise affected

shall remain valid.

SEC. 21. Effectivity Clause. — This Act shall take effect fifteen (15) days from its

publication in the Offici

| Gazette or in at least two (2) newspapers of general circulation,

Approved,