Under the program, students in 3rd and 4th year college can each borrow up to P8,000 every semester, which is payable two years after graduation.
Loans less than P4,000 can be paid within five years, while those beyond P4,000 is payable within 10 years.
Mrs. Arroyo handed a check for P200 million as initial fund for the program to Chairman Rolando Dizon of the Commission on Higher Education (CHED) in ceremonies at the Araneta Coliseum in Cubao, Quezon City yesterday.
However, Sen. Edgardo Angara warned Mrs. Arroyo that she could be charged with technical malversation if she uses the CHED’s trust fund to finance the Student’s Assistance Fund for Education Program for a Strong Republic.
"The trust fund — I was responsible for putting that together — is supposed to be an endowment fund contributed by the (Philippine Charity Sweepstakes Office) and the Philippine Tourism Authority," he said.
"So far the government got about P3 billion. So there is a balance still at about P2 billion. This fund is intended for developing higher education and scholarship is definitely a priority."
Speaking at the ceremonies, Mrs. Arroyo said P200 million would be used to implement the program in Metro Manila, with the remaining P300 million to be spent for students in other parts of the country.
Mrs. Arroyo said funds for the educational assistance program will be taken from this year’s national budget.
"Now the 2004 budget will give the biggest funding support to education and scholarship in our history," she said.
"This is what we’re launching, interest-free student loan program."
Mrs. Arroyo said her father, the late President Diosdado Macapagal, had inspired her to revive the "Study Now, Pay Later" program.
"I understand this problem because this is the story of my late father...," she said. "So I decided to act to solve the problem of Diosdado Macapagal in the present generation."
The Student’s Assistance Fund for Education Program for a Strong Republic program will be administered by the CHED in coordination with the office of Presidential Assistant for Youth Affairs Bambam Aquino. — Marichu Villanueva, Jose Rodel Clapano