A House of Representatives leader is pushing for the full implementation of the Higher Education Contribution Program (HECS) under the Free Tuition Act (RA 10931), a student loan program at low interest rate, where students will only pay off their tuition loans when they reach a certain level of income.
House Ways and Means Committee Chairman Joey Sarte Salceda said the program will ensure that “anyone can go to any private school of their choice as long as they meet the conditions of admission to this school.
Salceda added, “Undeniably, there are private school programs, especially at 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 meet the requirements of that school.
With higher incomes in the future, Salceda explained, “the student should be able to gradually repay the loan through reasonable monthly contributions incorporated into the SSS or GSIS contributions. Payment of the loan amount will begin once that the beneficiary will have obtained gainful employment with remuneration, remuneration or income reaching the mandatory repayment threshold. [CRT]. Therefore, the student only repays when able and, being publicly funded, the loans do not bloat unlike the US model,” Salceda added.
Section 8 of RA 10931 would allow this by providing very low interest student loans which borrowers can pay as a small deduction from their salary once they reach a certain level of salary.
“If they earn below that level, they won’t be required to start paying yet,” added Salceda, lead author of Free College Tuition Law.
Salceda made the pitch in his speech accepting a plaque of appreciation from the Coordinating Council of Private Educational Associations of the Philippines (Cocopea) in recognition of his primary authorship and sponsorship of a clearer tax system for private schools under RA 11635, which President Duterte recently signed.
“The theory is that private spending on education is a way to increase long-term personal income. Therefore, part of this hypothetical future income can be borrowed by the student to fund current tuition,” Salceda said in his speech.
Salceda describes the program as a “gradual program to study now, pay later”.
Salceda also described the program as a “balancing factor” for the free tuition program at state universities and colleges. “If state college is now free, we need to find a balancing factor to make private education affordable as well,” Salceda said.