College students who lack financial support may soon be able to get a loan from private banks or government institutions to pay for their tuition and other expenses.
Under the bill that was filed by the chair of the House basic education committee Roman Romulo, a student may pay the loan in installments under reasonable interest rates at least two years after he or she has graduated.
The congressman, in filing House Bill No. 5792, proposed the creation of a “Student Assistance Program” that would help students to get loans covering tuition, miscellaneous fees, as well as other costs of attendance—books, projects, food, and transportation.
Consequently, the lender will get corresponding tax credits. Lenders may charge the student borrower an interest based on the 90-day treasury bill rate at the time of the approval of the loan, and an additional 3-percentage-point interest.
However, according to the bill, eligible priority students will have an additional 5-percentage points interest which will not be payable by them but may be claimed by the lender as tax credit against gross receipts tax.
In paying the loan, student borrowers may file a request with the Government Service Insurance System (GSIS) or the Social Security System (SSS) “to collect the repayment of the loan through their system of salary deduction and withholding.”
Those seeking employment abroad may get a similar arrangement with the Philippine Overseas Employment Administration (POEA).
Romulo said the proposal would encourage private sector, particularly banks, to participate in making funds available to deserving students who need financial assistance.
A similar program for poor students was set in 1968. However, the financing solely came from the government under Sen. Benigno Aquino Jr.
Republic Act No. 6728 or the Government Assistance to Students and Teachers in Private Education Act was then signed by President Corazon Aquino on June 10, 1989.
The law also included a provision for the “Study Now, Pay Later Plan” (SNPLP) that the Department of Education, Culture and Sports, and the precursor of the Department of Education (DepEd) would be administering.