Salceda pushes low interest college loan programs

January 22, 2022 Ryan Ponce Pacpaco 187 views

HOUSE committee on ways and means chairman and Albay 2nd District Rep. Joey Sarte Salceda has sought the full implementation of the Higher Education Contribution Scheme (HECS) under the Free College Tuition Law (RA 10931), a low-interest student loans program, where students will amortize their tuition loans only when they reach a certain income level.

Salceda said the scheme will ensure that “anybody can go to any private school they choose as long as they pass the admissions requirements of that school.”

“Undeniably, there are private school programs, especially in top private universities, that state universities and colleges cannot offer. Private universities are also a source of innovation in higher education in the country. We want to make sure that every student can go to any school they choose as long as they pass the requirements of that school,” Salceda said.

“Section 8 of RA 10931 would allow that by providing very low-interest student loans that borrowers can pay as a small deduction from their salaries once they reach a certain salary level. If they earn below that level, they will not yet be required to start paying,” Salceda, one of the principal authors of the Free College Tuition Law, added.

Salceda made the pitch in his acceptance speech for a Plaque of Appreciation awarded by the Coordinating Council of Private Educational Associations of the Philippines (COCOPEA) in recognition of his principal authorship and sponsorship of a clearer tax regime for private schools under RA 11635, which President Duterte recently signed.

“The theory is that private expenditures on education are a means to increase long-term personal income. Hence, a portion of that hypothetical future income can be borrowed by the student to finance present education fees,” Salceda said in his speech.

“With increased income in the future, the student should be able to gradually pay off the loan through reasonable monthly contributions incorporated in the SSS or GSIS contributions. Payment of the loan amount will commence once the beneficiary secures any gainful employment with compensation, remuneration, or earnings that reaches the Compulsory Repayment Threshold (CRT). Hence, the student repays only once capable, and, being state-financed, the loans do not balloon unlike the US model,” Salceda added.

He described the scheme as a “progressive study-now, pay-later scheme.”
Salceda also described the scheme as a “balancing factor” to the free college tuition scheme in state universities and colleges.

“In the meantime, I will continue the fight for higher tertiary education subsidy or TES for private schools and the implementation of a more universal HECS,” Salceda concluded.