THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES } 
First Regular Session 
S. No. 
24 
INTRODUCED BY HON. MANUEL B. VILLAR JR. 
EXPLANATORY NOTE 
A large portion of Filipinos are poor and unable to access higher education -- making 
them unable to rise above themselves no matter how dedicated and industrious they may be 
simply because they possess only the most rudimentary skills. Their very poverty places the 
education, required for higher level skills beyond their reach. Access to higher education is 
the first step towards breaking the shackles of poverty. 
This bill seeks to make higher education accessible to the poor through the creation of 
a National Student Loan Board - an extension on a nationwide basis of the cross-subsidy 
program df the University of the Philippines known as the Socialized Tuition and Financial 
Assistance Program (STFAP). 
Monthly contributions shall be made by persons within specific income brackets that 
will go into a National Students Loan Fund. These contributions will be graduated, from 
one-half percent to four percent of income, according to income bracket. 
T1-lere is a great need to provide a National Student Loan Program to assist the poor 
and give \hem access to tertiary education. We will only be able to attain our vision of 
becoming'the next economic tiger of Asia by educating our less fortunate. 
h'vital recognition of the importance of education to nation building, the passage of 
this bill is earnestly requested. 
MANUEL B. V LLAR, JR. 
Senat r a 


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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
INTRODUCED BY HON. MANUEL B. V E L m  JR. 
AN ACT 
CREATING A NATIONAL STUDENT LOAN BOARD TO FORMULATE AND 
IMPLEMENT A NATIONAL STUDENT LOAN PROGRAM FOR THE 
POOR, AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. TitZe. - This Act shall be known as the “National Student Loan 
Program for the Poor Act of 2004.” 
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SECTION 2. Defirzition of Terms. - For the purpose of this Act: 
“Scholar” refers to a designated qualified beneficiary of contributors who draws 
from the National Student Loan Fund to support his tertiary education; 
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“National Student Loan Fund” refers to a cross-subsidy benefit fund collected by 
the national government and lent to qualified scholars; 
“National Student Loan Board” refers to a governing body under the Office of 
the President tasked to implement the provisions of this Act; 
“Board of Directors ” refers to the governing body of the Student Loan Board and 
shall exercise the powers and duties hereinafter defined. 
“Monthly Contribution ” refers to the voluntary contributions of income earners to 
the Fund, based on the National Economic Development Authority (NEDA) 
income brackets; 
“Income Brackets ” refer to the classification system wherein income earners as 
contributors to the fund are ranked according to annual family income. 


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SECTION 3. National Student Loan Board. - There is hereby created a National 
Student Loan Board, hereinafter referred to as the Board. The Board is composed of the 
Secretary of Education, Culture and Sports as ex oficio Chairman, the Chairman on 
Commission on Higher Education (CHED) as ex officio Vice-chairman, and the following 
heads of the following government agencies as ex officio members: 
a. Government Insurance Service System (GSIS); 
b. Social Security System (SSS); 
c. Philippine Overseas Employment Administration (POEA); 
d. National Anti-Poverty Commission (NAPC); 
e. Presidential Commission on Urban Poor (PCUP); and 
f. League of Provincial Governors. 
The President of the Philippines shall appoint ten (10) other members of the Board, 
eight (8) of whom shall be chosen from nominees taken fiom state universities and colleges 
and two (2) nominees taken fiom non-governmental organization involved in education. 
SECTION 4. Powers and Functions of the Board. - The powers and the functions 
of the Board are as follows: 
(a) Formulate the National Student Loan Program for the Poor within one (1) year 
after the effectivity of this Act; 
(b) Promulgate the necessary guidelines, rules and regulations for the lending of 
funds for the education of the poor; 
(c) Allocate and disburse funds for the education of the poor; 
(d) Cancel, suspend, or revoke loans in case of deceit, fraud or cheating of any- kind 
on the part of the borrower; 
(e) Implement the orders, rules, and regulations and guidelines passed by the Board 
pursuant to the National Student Loan Program; 
(f) Conduct annual spot and random inspections on borrowers; 
(g) Conduct studies and researches for the improvement of educational services for 
the poor; 
(h) Appoint the necessary staff or employees for the Board; 
(i) Reprimand, suspend or dismiss erring officials and employees of the Student 
Loan Board based on the rules and regulations of the Civil Service Commission; 
(j) Act as trustees for the Investment Portfolio fund which shall be created out of its 
excess over semestral operating and lending requirements; 
(k) Appoint an investment manager for the Investment Portfolio Fund, should it be 
deemed necessary; Provided, That such appointment should not exceed three (3) 
years, and subject to performance review prior to renewal; 


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(1) Appoint, every three (3) years, a professional actuary to perform an actuarial 
review of the Student Loan Fund; 
(m) Report to the Office of the President on monthly basis; and 
(n) Perform such other powers and functions as may be necessary by the President of 
the Philippines 
SECTION 5. Meetings of the Board. - The Board shall hold monthly meetings to be 
held every first Monday of the month. The Chairman of the Board shall be the presiding 
officer. In the absence of the Chairman, the Vice-chairman of the Board shall automatically 
take over. Minutes of all meetings shall be recorded and attested to by a simple majority of 
all regular board members. 
A. At least one meeting shall be devoted to a review of the Student Loan Fund’s 
performance in terms of the following: 
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Total number of current beneficiaries; 
Number of dropouts, voluntary or revoked; 
Average academic performance by year of study; 
Breakdown of scholars by field of study; 
Breakdown of scholars by region of origin; 
Breakdown of scholars by place of study; and 
Breakdown of scholars by size of annual family income and family 
livelihood 
B. At least one meeting shall be devoted to the review and approval of individual 
scholars 
C. At least one meeting per quarter shall be devoted to a financial review of the 
Student Loan Fund. This review shall cover, among others, the following: 
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Total contributions received; 
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Total repayments made; and 
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Current cash position as against cash requirements for the quarter. 
SECTION 6. Quorum. - All meetings shall only be convened with a quorum of 
simple majority of the regular board members. All members convened without the said 
quorum shall be deemed null and void. 
SECTION 7. Term of Office. - The members of the Board shall hold office for a 
term of three (3) years after their appointment or until their successors shall have been 
appointed and qualified. Should a member of the Board fail to complete the term, the 
successor shall be appointed by the President of the Philippines but only for the unexpired 
portion of the term. 
The members of the Board shall be entitled to reasonable travelling expenses and 
honoraria. 
SECTION 8. Executive Director. - There shall be an executive director who shall 
be appointed by the Board and shall have the rank of a bureau director, with a fix term of 
three (3) years, renewable for another term. 


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SECTION 9. Executive Committee. - The Board shall create an Executive 
Committee who shall be headed by the Executive Director to determine the number of 
employees needed to carry out the functions of the Student Loan Board. The Board shall 
likewise provide for the qualifications and compensation of employees in the Executive 
Committee in accordance with the existing civil service rules and regulations. 
The Executive Committee shall exercise the following hnctions: 
(a) Recommend the approval of loan applications by the Board; 
(b) Review, evaluate and assess programs, plans of action and agenda of the Board; 
(c) Review, evaluate and assess the academic standing of loan borrowers; 
(d) Recommend the cancellation or revocation of loans, and 
(e) Perform such other powers and functions as maybe determined by the Board. 
SECTION 10. National Student Loan Fund. - All income earners as determined 
under Section 10 hereof, who wants to be members of the National Student Loan Fund and 
avail of the Benefits thereof, are hereby required to contribute through salary deductions, to 
the National Student Loan Fund. Such monthly contribution shall be based on the NEDA 
income brackets. 
All monthly contributions shall be deposited by the Board in the Development Bank 
of the Philippines (DBP) under the name of the National Students Loan Fund. 
For the purpose of developing the relevant implementing details of the National 
Student Loan Program, the Board shall use as principal reference the Socialized Tuition and 
Financial Assistance Program (STFAP) of the University of the Philippines. 
SECTION 11. Income Brackets. - National Economic Development Authority 
(NEDA) income brackets of wage earners shall be the basis of contributions to the National 
Student Loan Fund. The contribution structure shall be progressive, from a minimum of one- 
half percent of individual income bracket to a maximum of four percent of individual income 
bracket. 
SECTION 12. Beneficiary Loan Amount. - The loan available to a scholar as 
beneficiary of income earner who is a member of the National Student Loan Fund shall be 
subject to the following terms and conditions: 
a. Availability - Loans shall be available only for undergraduate degree courses. 
This program shall not cover post graduate courses 
b. Loan Size - Loan amount shall be equivalent to the prevailing cost per academic 
unit at the University of the Philippines multiplied by eighteen (18) academic 
units. 
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c. Loan Repayment - Loans shall carry an annual interest rate of 15% payable over 
five (5) years commencing the first year after graduation of the scholar. Loan 
amortization computation shall use the Straight-Line Method. Amortization shall 
be deductible from saJary of income earners as members or from the salary of 
employed graduate scholars. It may also be paid directly to the fund in case of 
self-employed graduate scholars . 


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Application - Loans shall be applicable to the school of choice of the designated 
beneficiary as scholar, to cover tuition and living allowance. Amounts in excess 
of the loan needed to cover the scholar’s needs to have to be derived from other 
sources. 
Drawdown - Upon the approval of a loan, an amount equivalent to the tuition of 
the scholar can immediately be 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 first 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 13. Investment Portfolio. - Monies representing contributions to the 
Student Loan Fund shall be placed in an investment portfolio fund. The interest to be derived 
out of the investment portfolio shall be used to hnd all scholarships for qualified scholars in 
academic institutions of their choice, Provided, That such educational institutions are duly 
accredited by the DECS and CHED and are included in a list of qualified tertiary education 
institutions prepared by the Board for this Purpose. 
SECTION 14. Loan Repayments. - The heads of the GSIS, the S S S ,  the 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 15. Tax Dedactibility. - 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 16. 
Implementing Rules and Regulations. - The Department of 
Education, Culture and Sports and the Commission on Higher Education shall, within six (6) 
months from effectivity of this Act, issue the necessary rules and regulations to carry out the 
objective of this Act. 
SECTION 17. 
Appropriations. - The initial amount of Ten Million Pesos 
(P 10,000,000.00) is hereby appropriated for the effective implementation of this Act. 
Thereafter, such amounts as may be necessary for the continued operations of the Board shall 
be included in the annual General Appropriations Act. 
SECTION 18. Separability Clause. - If for any reason any provision of this Act is 
declared unconstitutional or invalid, parts or provisions of this Act o which are not affected 
shall continue to be in force and effect. 
SECTION 19. Repealing Clause. - All laws, executive orders and presidential 
decrees, rules and regulations or parts thereof inconsistent with any provisions of this Act are 
hereby repealed or amended accordingly. 
SECTION 20. Effectivity - This act shall take effect fifteen (15) days following its 
publication in the OfJicial Gazette or in any two (2) national newspapers of general 
circulation. 
Approved,