MANILA, Philippines -The country’s private higher education institutions, government financial institutions and even the Bangko Sentral ng Pilipinas have expressed their support to a proposed bill that would establish a loan facility for college and university students.
During a hearing on the proposed Senate Bill 3285 authored by Senator Edgardo Angara Tuesday, it was made clear that the country is way behind many countries including its Asian neighbors, in terms of providing financial support for higher education students.
Dr. Vincent Fabella, president of the Jose Rizal University, representing the Coordinating Council of Private Educational Associations (COCOPEA), noted that the cost of higher education continues to rise in the country and across the globe.
“We’re part of that trend. But around the world, government and banks help finance it. So the idea is the students study first, when they get the jobs and the money, then they repay their loans. That’s what we’re trying to push with the proposed bill,” Fabella said.
According to Fabella, the estimated cost for all higher education students in the country, including the tuition and miscellaneous fees, would amount to P145 billion.
Based on the models of Hong Kong, which provides student loans of up to 50 percent of the total cost, and South Korea at 30 percent, Fabella said that the government would have to shell out between P36 billion and P72 billion for the loan facility.
At present, Angara noted that the only loan facility available to higher education students in the country involves the Social Security System (SSS) and Government Service Insurance System (GSIS).
The total amount made available by the national government and the two pension systems for its members and dependents for education loans was pegged at P12.5 billion a year.
For the SSS, loans program management head Miriam Milan said that a member could get a maximum of P15,000 per semester for degree courses while vocational courses would get only P7,500 per semester.
The GSIS, on the other hand, provides a maximum of P25,000 per semester.
Fabella pointed out that the average tuition for private schools is somewhere between P40,000 to P50,000 per semester, so what the two pension system provide for student loans is still far from what is needed.
Angara explained that the approval of the bill would allow the students and parents to tap the new loan facility through the private banks to cover the balance after SSS or GSIS loans.
He said that the interest rates on the loans under the new facility would be lower than market rates.
What makes the proposed loan facility different from the existing products is that the loans do not have to be paid right away.
“Education is the only activity that parents pay in advance. At the beginning of the semester you have to pay for the (cost of) full semester,” Angara said.
“Most of the student loans now, the difference is, when you take (out) the loan you have to start paying right away, which is unfair because students don’t have the money now, they have money when they graduate. That’s how it’s done in other countries,” he said.