MANILA, Philippines - Students who do not have enough to pay for college education would be able to borrow money from banks if a Senate bill establishing a student loan program becomes a law.
Senate Bill 3285 or the "Fund for Assistance to Students and Parents in Private Education Act of 2012" seeks to put up a fund that will be lent to students, who will have to repay it once they are already employed.
The bill's author, Senate education committee chairman Edgardo Angara, said it will be helpful for students and their parents especially because of the K-12 program, which puts an additional two years to basic education and means more expenses.
The bill caters mainly to private school students because unlike state universities and colleges, private schools do not receive government subsidy and increase their tuition from time to time.
"This will really open up a huge fund for university and college students," Angara said after his committee's hearing on the proposal on Tuesday.
At the hearing, Vincent Fabella of the Coordinating Council for Private Educational Associations said other countries grant loans of up to 50 percent of the total cost of a student's education.
In the Philippines, he said covering 50 percent would require government to shell out at least P72 billion yearly for the loan program. This is based on his organization's estimate that all students in private higher educational institutions pay a total of P145 billion a year for their education.
Fabella noted that existing loan programs grant very limited amounts. The SSS, for instance, gives up to P15,000 per semester.
He added: "Most of the student loans now, the difference is when you take the loan, you have to start paying right away, which is unfair because the students don't have the money now."
Angara said various government institutions like the Philippine Amusement and Gaming Corporation, Government Service Insurance System, Social Security System, Land Bank of the Philippines, and the Development Bank of the Philippines have committed to contribute to the scholarship fund.
Once the bill is enacted into law, students or their parents may secure the loans through commercial banks.
The proposal also establishes a Policymaking Council that will formulate policies for the program, including the qualifications of applicants. It will be composed of members from the Commission on Higher Education, Department of Labor and Employment, National Economic and Development Authority, Department of Finance, Bangko Sentral ng Pilipinas, SSS, GSIS and private educational institutions.
Fabella explained that the proposed law aims to strike a balance between students' financial needs and schools' need to equip themselves to provide quality education.
"A lot of kids and parents aren't getting access to good education. That's one side of the coin. The other side of the coin, of course, is everyone wants our universities and colleges to be ranked among the best, which is expensive," he said.
"That's really what we're trying to balance out. Usually, the way other countries have been able to bridge that gap is through student financing. That's what's missing here."
Angara said he hopes to pass the bill before the end of the 15th Congress next year.