‘Study now, pay later’ funds run out

With 99 percent of those taking out government student loans defaulting on paying the money back, this noble college scholarship program might as well be renamed "Study Now, Pay Never."

Originally promoted with a cheery motto, "Study Now, Pay Later Plan," the SNPL program under the Commission on Higher Education (CHED) was meant to help eligible students get a leg up on their education costs.

Now, 30 years after its inception, it appears that most students who take out loans use both legs — to run away from paying the money back.

"The reason why the Commission on Higher Education allocates fewer funds to the student loan program is its failure to collect repayment from loan borrowers," revealed Albay Rep. Joey Salceda, one of the economic advisers of President Arroyo.

He revealed that an eyebrow-raising "99 percent of those who availed themselves (of the SNPL program) have failed to pay back their loans."

The chairman of the House appropriations committee cited a UNESCO study showing the government had a repayment rate of 46 percent from 1976 to 1991, but this figure has nose-dived over the years — down to a lowly three percent in 1992-1994 and a miserable one percent from 1995 to present.

Among the reasons cited for the government’s failure to collect were "lack of information" on borrowers’ whereabouts after graduation," "unemployment or low income" of SNPLP beneficiaries, an "inadequate data bank," and the "fast turnover" of program personnel.

Despite these shortcomings, Salceda saw no reason to recommend canceling the loan program, and even went on to file House Bill 5315, which seeks "not only to increase government financial assistance but to reach more deserving beneficiaries."

"In a subtle way, the bill aims to develop and strengthen the value of accountability and responsibility on the part of the Filipinos to pay their loans," the senior administration lawmaker said, hoping beneficiaries would pay back SNPLP loans this time around.

Salceda also urged the government to "track down" beneficiaries to "obtain 100-percent repayment and augment funds for the college education program." The non-payment of previous loans has significantly diminished the government’s funding for other poor but deserving college students.

He hopes the Arroyo administration will be able to "widen the access of deserving Filipino students to college education on the one hand, and to brighten the prospect of getting back the funds invested to higher education on the other."

"Considering all the factors mentioned, CHED is optimistic that with the cooperation and assistance from other agencies in tracking loan borrowers and collecting repayments, there is a chance to obtain 90 to 100 percent repayment," Salceda added.

The Bicolano lawmaker, an economist by profession, likewise suggested a minimal interest on repayments to make it more realistic. "Making student loan payable through a simple six-percent interest and adopting a borrower-friendly scheme would make it even more viable."

CHED, under its charter, Republic Act 7722, or the Higher Education Act of 1994, allocates P363.1 million every year for some 33,000 deserving government scholars. Of this amount, a measly P11.7 million — or three percent — goes to the student loan program SNPLP.