House Bill No. 5792 creates a “Student Assistance Program” for poor and unfortunate college students in the Philippines.
Student Assistance Program Bill
PHILIPPINES – Financially incapable college students will soon be able to make a student loan from private banks and government-funded institutions to pay tuition and university expenses. The chair of the House basic education committee just petitioned a bill that will allow student loans in the Philippines.
Under House Bill No.5792, or the “Student Assistance Program” Bill, college students will be allowed to take student loans that will cover university tuition, miscellaneous fees, books, projects, and other living expenses.
A student loan is a school first-pay-later program by the government that lets a student go to college at the expense of a loan taken from private or public funding institutions. The loan will be paid back in installments at least two years after the student graduated.
Pasig City Representative Roman Romulo guaranteed that the interest scheme for the Student Assistance Program is reasonable and achievable.
It is a two-way scheme. Both the lender and student will benefit from allowing and availing student loan privileges.
The initial provision of the bill states that a three percent interest rate to be paid by the borrower and an additional five percent, which is not payable by the student but will merit as a tax credit for the lender.
For the collection of payment, the government plans to incorporate the loan with existing salary deduction systems. For graduates who got hired in the government, they can deduct their student loan payments as an attachment to their Government Service Insurance System (GSIS) monthly dues.
As for those who got employed with private institutions, salary deduction will be part of their Social Security System (SSS) monthly dues.
In the case of work in foreign countries, an arrangement can be made through the Philippine Overseas Employment Administration.
Study Now, Pay Later Plan
An earlier student loan program by a former administration already existed before the Student Assitance Program. It was called the “Study Now, Pay Later Plan” (SNPLP) during the Corazon Aquino presidency in 1989.
The SNLP program offered student loans with at most 12 percent interest yearly. It was then revised to be more student-friendly by reducing the interest rate to six percent annually.
But despite the reduction of interest rates and revision of certain payment arrangements, the government agency in charge of the student loan process failed in implementing effective collection terms.
The current House bill proposal for the Student Assistance program is expected to iron the errors and mishaps of the former versions of the student loan program. If things work out fine, it will create more opportunities for financially unfortunate students to go into college and have a degree.