FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 955 
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Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
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This bill seeks to create a National Student Loan Board to implement a National 
Student Loan Program for the poor, define its powers and functions 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 7Q% 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 contribution shall be made by 
persons within specific income brackets and that such fund collected shall 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. 
".. 
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• 
MANUEL "LITO" M. LAPID 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
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SENATE 
S. No. 955 
Introduced by Senator Manuel "Lito" M. Lapid 
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, 
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES 
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 
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Student Loan Program for the Poor Act of 2010." 
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, 
SEC. 3. 
Definition of Terms. - For the purpose of this Act, the following 
terms shall have the corresponding meaning: 
a) 
Iskolar ng Bayan - hweinafter 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 Iskolars 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; 
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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 
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contributions of designated income earners to the Fund, based on the 
National Economic Development Administration (NEDA) income brackets; 
f) 
iskoiar Brackets - hereinafter called "brackets" shall refer to a beneficiary 
classification system wherein iskoiar 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 shall be composed of the following members: 
1) 
2) 
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. 
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 possess a third level eligibility. The 
Executive Director sh~1I receive a monthly 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. 
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 
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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. 
SEC. 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 
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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) 
f) 
To cancel, suspend, or revoke loans in cases of deceit, fraud or cheating 
of any kind on the part of the borrower; 
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. 
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 
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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. 
SEC. 7. 
Quorum for National Student Loan Board Meetings. -
All 
regular and emergency meetings shCiIi 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) 
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) 
f) 
To conduct annual spot and random inspections on borrowers; 
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; 
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j) 
To appoint the necessary staff and/or employees for the Executive 
Committee of the National Student Loan Board; 
h) 
To recommend the cancellation or revocation of loans; and 
i) 
To perform such other powers and functions as may be determined by the 
Board. 
SEC. 9. 
Student Loan Board Staff I Employees. - The National Student 
Loan Board shall determine the number of staff I 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 
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civil servants. 
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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 
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 /sko/ars 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. 
SEC. 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 %% of individual 
income bracket to a maximum of 4% of individual income bracket. 
SEC. 14. 
Beneficiary Loan Amount. - The loan available to an /sko/ar shall 
be semestral, and shall be subject to the following terms and conditions: 
a) 
Availability -
/sko/ar ng Bayan loans shall be available only for 
undergraduate degree courses. 
postgraduate courses. 
This program 
shall not cover 
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 
/sko/ar. 
Loan amortization computation shall use the Straight-Line 
Method. 
Amortizations shall be deductible from salary in the case of 
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employed graduate Iska/ar or paid directly to the Fund in the case of self-
employed graduate Iska/ars. 
d) 
Application - the loan shall be applicable to the school of choice of the 
Iska/ar, to cover tuition and living allowance. Amounts in excess of the 
loan needed to cover the Iska/ar'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 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. 
SEC. 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. 
SEC. 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. 
SEC. 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. 
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 shall be included in the annual General Appropriations Act. 
SEC. 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. 
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SEC. 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. 
SEC. 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, 
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