(5 PE PRESS
lee

[is > RECEIVED ® z

Republic of the Philippines a
HOUSE OF REPRESENTATIVES = pate: eter oF
Batasan Hills, Quezon City s TIME:
EIGHTEENTH CONGRESS Weg =
First Regular Session ‘en RS
I y
House Bill No,_5792 Moex SF

Introduced by
Representative Roman T. Romulo

EXPLANATORY NOTE

It is the constitutional mandate of the State to give priority to education in order to
foster patriotism and nationalism, accelerate social progress, and promote total human
liberation and development. The State has the duty to protect and promote the right of all
citizens to quality education at all levels and ensure universal access to such education.

The private sector particularly banks and government financial institutions play a vital
role in the national growth by providing an environment conducive to the sustained
development of the national economy

This bill seeks to promote quality education that is accessible for everyone by
encouraging the private sector's participation, particularly banks and government financial
institutions, in establishing a student assistance program where eligible students are afforded
an opportunity to attend vocational technical institutions, or institutions of higher education,
by making available to them funds procured through loans, to cover the cost of tuition fees and
other living expenses, payable in installments after graduation.

For these reasons, the passage of this bill is earnestly sought.

ERO

ROMAN T. ROMULO


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Batasan Hills, Quezon City
EIGHTEENTH CONGRESS
First Regular Session

House Bill No,_5792

Introduced by
Representative Roman T. Romulo

AN ACT ESTABLISHING A STUDENT ASSISTANCE PROGRAM BY BANKS AND
GOVERNMENT FINANCIAL INSTITUTIONS, AND FOR
OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Title. - This Act shall be known as the "The National Student Assistance
Act of 2019"

SECTION 2. Declaration of Policy Objectives. - It shall be a policy objective of the
State to assist eligible students obtain post-secondary education in vocational or technical
institutions, or institutions of higher education by

1) encouraging banks and government financial institutions to lend money to eligible
students to be repaid in installments, at least 24 months after the student graduates or leaves

the educational institution; and

2) providing incentives to these institutions in the form of tax credits and interest rates

that are guaranteed to realize a reasonable return on their investments.

SECTION 3. Definition of Terms. — The following terms are defined as follows:

CHED - shall refer to the Commission on Higher Education.


Eligible priority student — shall refer 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 education, at the time of the loan application.

Eligible student - shall refer to a student who has been accepted as an undergraduate student
at an institution of higher education, or in the case of a student already attending an institution,
one who is in good academic standing as an undergraduate, or one accepted for enrollment in

a post secondary vocational or technical institution

Government Financial Institutions - shall refer to those financial institutions in which the
government directly or indirectly owns majority of the capital stock and which are registered
and directly supervised by the Bangko Sentral ng Pilipinas,

GSIS - shall refer to the Government Service Insurance System.

Institution of Higher Education - means an educational institution that (a) admits as regular
students only persons having a certificate of graduation from an educational institution
providing secondary education, or the recognized equivalent of such a certificate; (b) is legally
authorized to provide an education beyond secondary education; (c) provides an educational
program for which the institution awards a bachelor's degree or provides not less than a 2 year
program that is acceptable for full credit toward such a degree; and (d) is accredited by the
CHED.

Lender - shall mean a bank or a government financial institution which provides loans to
student-borrowers pursuant to this Act

Post-secondary education — shall mean education and training in non-degree vocational and
technical courses offered in post-secondary vocational and technical institutions or education
in degree courses offered by higher educational institutions, the completion of which is attested
by a school diploma issued by or with permission of the Technical Education and Skills
Development Authority or the Commission on Higher Education, respectively

SSS - shall refer to the Social Security System.


State Assistance Council - shall mean the State Assistance Council, created under Republic
Act 6728 as amended by Republic Act 8545.

Student-borrower — shall mean an eligible student with a loan under this Act.

TESDA - shall mean the Technical Education and Skills Development Authority as established
under Republic Act No. 7796, otherwise known as the TESDA Law.

Vocational or technical institution ~ shall mean a TESDA-accredited institution which
provides an education designed at post-secondary and lower tertiary levels, officially
recognized as non-degree programs aimed at preparing technicians, and other categories of
workers by providing them with a broad range of general education, theoretical, scientific and
technological studies, and related job skills training

SECTION 4. Registration of Student Loan Programs under this Act. - Banks,
whether government or private, and government financial institutions shall allot at least three
percent (3%) of their loanable funds for loans to eligible students. Such banks and government
financial institutions shall be entitled to avail of the incentives under this Act by registration of
their student loan programs with the State Assistance Council and the Bangko Sentral ng

Pilipinas.

SECTION 5. Loan Application. - Any eligible student may file a loan application with
a participating bank or government financial institution. A loan application shall include,
among others:

a. A Student SSS or GSIS number;

b. A Taxpayer's Identification Number (TIN);

c. A certification from a vocational or technical institution, or an institution of higher
education stating that such student has been admitted for enrollment at such institution;

4. A list of expenses including the total tuition fees for the entire period of attendance
to complete the student's course or degree, with a necessary allowance for any increases that
the educational institution may rightfully make and the other miscellaneous expenses certified
by the educational institution;


e. A reasonable approximation of the cost of attendance of the student in the chosen
educational institution which shall include, among others, the cost of books, board, lodging and
transportation expenses; and

£ All other requirements that the participating bank or government financial institution
may impose for the proper identification of the student. The student shall also state in the
application whether he prefers the private or public sector for future employment.

SECTION 6. Loan Coverage. - The loan shall include the tuition and miscellaneous fees of the
educational institution. It shall likewise include an amount for cost of attendance covering
necessary expenses of the student for books, food, transportation and a reasonable allowance
for projects and other school requirements

SECTION 7. Loan Disbursement. - Upon approval of the loan application, the loan shall be
disbursed in tranches every semester or trimester, or any other term of attendance, depending,
on the academic calendar adopted by the educational institution. Any succeeding tranche shall
be disbursed on the condition that the student-borrower completes the term previously enrolled
in as certified by the educational institution. The tuition and miscellaneous fees may be
disbursed or be made payable directly to the educational institution.

SECTION 8, Withholding of Subsequent Disbursements. - A lender that receives information
that the student-borrower has ceased to be enrolled may withhold the disbursement for the
ensuing school term or any succeeding disbursements. Any disbursement which is so withheld
shall be credited to the student-borrower's loan and treated as a pre-payment thereon

SECTION 9. Interest Rate and Tax Credit. - For any loan procured under this Act, lenders
shall charge an interest based on the prevailing Ninety (90) day Treasury Bill Rate at the time
of the approval of the loan to be paid by the student-borrower, and an additional interest of
three percent (3%). Loans granted to eligible priority students shall have an additional interest
of five percent (5%) which shall not be payable by the student but maybe claimed by the lender
as a tax credit against gross receipts tax. Provided that the additional interest shall be allowed
as a tax credit against gross receipts tax for the same taxable year that the additional interest is
due. Provided, further, That the total amount of the additional interest and the claimed tax
credit shall be subject to proper documentation and to the provisions of the National Internal

Revenue Code, as amended.


SECTION 10. 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 interest thereon, in equal installments (or, if the
borrower so requests, in graduated periodic installments) payable quarterly, bi-monthly, or
monthly at the option of the student-borrower,

b. Include a provision for acceleration of repayment of the whole, or any part, of such
loan, at the option of the student;

c. Repayment of the principal amount of the loan to the lender, together with the accrued
interest thereon, shall be repaid over a period beginning not earlier than twenty four (24)
months after the student-borrower ceases attending the vocational, technical and higher
educational institution, and ending 8 years after such date, except that such period may begin
earlier than twenty four (24) months upon the request of the student-borrower.

SECTION 11. Collection. A lender may file a request with the GSIS or the SSS to collect the
repayment of the loan through their system of salary deduction and withholding. A lender may
likewise enter into an arrangement with the Philippine Overseas Employment Agency to ensure

collection from student-borrowers seeking employment abroad.

SECTION 12. Program Administration/Implementing Rules and Regulations. - The State
Assistance Council shall be responsible for policy guidance and direction, monitoring and
evaluation of the student assistance program under this Act. Representatives from the TESDA
and the CHED shall sit as members of the State Assistance Council. The State Assistance
Council, the Department of Finance and the Bangko Sentral ng Pilipinas shall formulate the
implementing rules and regulations of this Act in consultation with the SSS, GSIS and the
Bureau of Internal Revenue, and shall promulgate such implementing rules and regulations
within ninety (90) days from the effectivity of this Act.

SECTION 13. Student Number. - For proper implementation of the Act and to better facilitate
the collection of the loan, the SSS or the GSIS shall issue, upon application, an SSS or GSIS
number to the student-borrower. The number so issued shall serve as the permanent SSS or

GSIS number of the student-borrower.


SECTION 14, Separability clause. - If any provision of this Act is declared unconstitutional
or otherwise invalid, the validity of the other provisions shall not be affected thereby

SECTION 15. Repealing clause. - All laws, decrees, orders, rules and regulations or parts
thereof inconsistent with this Act are hereby repealed or modified accordingly.

SECTION 16. Effectivity Clause. - This Act shall take effect fifteen (15) days following the

completion of its publication in two (2) newspapers of general circulation