Short-term loan program for college students launched

MANILA, Philippines — College students will soon be able to apply for loans amounting to as much as P60,000 to cover their tuition and other education expenses. 

The Commission on Higher Education (CHED) on Wednesday formally launched the short-term student loan program, which is mandated by Republic Act 10391 or the Universal Access to Quality Tertiary Education that waived tuition and other fees in public tertiary institutions. 

The launch coincided with the signing of the memorandum of agreement between CHED, the Unified Financial Assistance System for Tertiary Education (UniFAST) and the Development Bank of the Philippines (DBP) to facilitate the automated disbursements of the student loans and other financial assistance grants for students. 

“This partnership between CHED/UniFAST and DBP is the long-awaited final component of RA 10931 to help needy students pursue undergraduate and graduate studies in public and private schools by providing them short term loans for their education needs,” said CHED chairman J. Prospero De Vera III. 

Under the partnership, the DBP will come up with a payment scheme called direct remittance servicing system to ensure timely disbursement of the funds. 

The short-term loan program will be available for students enrolled in public and private tertiary institutions that are designated as program implementers by CHED for colleges and universities and the Technical Education Skills Development Authority (TESDA) for tech-voc institutions. 

To be designated as partner, the HEIs should be in the UniFAST registry of institutions and programs and must enter into an agreement with CHED or TESDA, committing that it is capable of implementing the program.  

De Vera said they will work closely with higher education institutions that have no existing student loan systems to ensure the program’s immediate implementation. 

An initial P1 billion is allocated for the program. 

CHED said the students may use the loan for tuition and other school fees, books, tools, equipment, stipend and payment for review in licensure exams. 

Students taking post-graduate degrees, including medicine and law, are also allowed to apply for loans. 

De Vera said they have instituted mechanisms to ensure that the program will not be a case of “study now, pay never.”

To encourage repayment, he said they agreed that the interest rate of six percent per annum will be waived for those who will be able to repay the loan within the academic term. 

Sanctions will also be imposed “to instill strictness and seriousness of the government to collect repayment from student loans.”