LOW-INTEREST STUDENT LOAN PROGRAM GETS FULL BACKING OF LAWMAKER
ALBAY Representative Joey Salceda is pushing for the full implementation of the low-interest student loan program.
Salceda said the measure will be alleviated from the Higher Education Contribution Scheme under the Free College Tuition Law.
He noted the scheme will ensure students can go to any private school they choose as long as they pass the admission requirements.
“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 said.
“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,” he added.
With increased income in the future, the lawmaker said students should be able to gradually pay off the loan through reasonable monthly contributions incorporated in the Social Security System or Government Service Insurance System contributions.
“The 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,” Salceda pointed out.
“Hence, the student repays only once capable, and, being state-financed, the loans do not balloon unlike the US model,” he said.