Solon calls for implementation of low-interest student loan program

Joey Salceda, Albay Rep (File photo)

MANILA – A lawmaker on Friday pushed for the full implementation of the Higher Education Contribution Program (HECS) under the Free Tuition Act, which is a low-interest student loan program , in which students will only repay their tuition loans when they reach a certain level of income.

In a statement, Albay representative Joey Salceda said the program will ensure that each student can go to any private school of their choice as long as they meet that school’s admission requirements.

He noted that 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,” he said. “Section 8 of RA 10931 would enable this by providing very low interest student loans which borrowers can pay as a small deduction from their salary once they have reached a certain level of salary. If they win below that level, they won’t be required to start paying yet,” Salceda said.

He said the theory is that private spending on education is a way to increase personal income in the long term, therefore some of this hypothetical future income can be borrowed by the student to fund tuition fees. current.

“With increased earnings in the future, the student should be able to gradually repay the loan through reasonable monthly contributions incorporated into SSS (Social Security System) or GSIS (Government Services Assurance System) contributions .

He said that the payment of the loan amount will start once the beneficiary obtains gainful employment with compensation, earnings or income reaching the mandatory repayment threshold (CRT).

“As a result, the student only repays when able, and, being publicly funded, the loans don’t bloat like the US model does,” Salceda said.

Salceda described the program as a “progressive program of immediate study, later payment, as well as a “balancing factor” for the free tuition program at universities and state colleges.

“If state college is now free, we need to find a balancing factor to make private education affordable as well,” he said. (NAP)

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