Maceda and the Study Now Pay Later Program

Ernie Maceda, the senior statesman of the 2013 senatorial race has surprised me with his energy, grasp of issues, and well articulated advocacy for education throughout the gruelling campaign season.

Last night (April 21) in the ABS CBN Harapan 2013 Senatorial Debates at the La Consolacion College in historic Mendiola, I drew his name in the question and answer portion of the program where I was in a panel with veteran journalists Linda Jumilla and Tony Velasquez.

His platform includes a proposal to radically increase scholarship grants with target tof 50% of all college students as grantees and a revival of the “Study Now Pay Later” program which was initiated, if I remember right, when I was a student in UP another lifetime ago.

So I asked him the following questions:

Nakalagay sa plataporma ninyo na gusto ninyong damihan ang mga scholarship grants para sa mga estudyante at muling buhayin ang Study Now Pay Later program.

Hindi pa naman patay ang Study Now Pay Later program at ang Commission on Higher Education (CHED) nga ay maglalaan ng P8B sa programang ito sa taong ito.

Ang tanong ko ay ano ang pagkaka-iba ng inyong panukalang Study Now Pay Later sa ginagawa ng CHED at paano ninyo iibahin ito para magbayad naman ang mga estudyanteng umuutang. Ayon sa CHED 12% lang ang nagbabayad at sabi naming COA 1% lang daw ang nagbabayad base sa kanilang audit.

(Your platform includes a proposal to radically increase scholarship grants with a target of 50% of all college students as grantees and revival of the “Study Now, Pay Later” program.

The Study Now Pay Later program is still alive and the Commission on Higher Education (CHED) has allocated some P8B for this program in 2013.

My question is how different is your Study Now Pay Later proposal to that currently being implemented by CHED and how would you reform it so that students actually pay their loans?)

Under the Study Now Pay Later program (SNPLP) poor but deserving students are granted loans for payment of tuition and other school fees as well as expenses on books and board and lodging. The beneficiaries are supposed to pay the loan two years after securing employment at 6 percent annual interest.

While the SNPLP was laudable in its intent, it has been one of the most poorly implemented programs in higher education in the past decades.

The data varies, CHED reports that while some 16,000 students have benefited the program since 1999, only P26.8 million or 12.36 percent of the P217-million loan facility was paid as of December 2012.  

Previous CHED administration have openly admitted the SNPL program was a “costly blunder” and a study conducted by the United Nations Educational, Scientific and Cultural Organization (Unesco) showed that since 1995, only 1% of the poor students who availed of SNPLP loans have paid their debts.

The Commission on Audit (COA) noted  that in CHED offices in National Capital Region, Regions 4A, 4B, 9 and 13, only P592,164.89 or less than one percent of the total loans receivables of P98,202,800.24 in calendar year 2011 has been collected (COA Audit Report 2011).

The reasons for the low repayment rate are numerous such as the lack of trained personnel to undertake collections, inability of beneficiaries to immediately find employment, low salaries of employed beneficiaries, or even the general aversion to pay for government services.

With his long legislative and executive experience, I had hoped Maceda would be forthright and detailed in his explanation.

I was frustrated.

All he said was that CHED should increase the funding for the program from P8B to P80B and that implementation needs to be improved. He then went on to say that UP and other SUC’s should provide tuition-free education so that more students can complete higher education.

What I expected was details on how current government policy on student loans can be examined and improved to cover more beneficiaries, reduce the interest charged for borrowers, and how student loans which have become the staple assistance to finish higher education in many developed countries can actually work in the Philippines.

There is, for example, a pending bill in Congress called the Unified Financial Assistance System for Higher and Technical Education that seeks to improve the SNPL program. While I have some reservations in its approach and governance framework, it would be interesting to get the position of Maceda on this proposal.

Sadly, Ernie Maceda chose to talk in general platitudes and wasted the opportunity to generate a buzz about this important proposal.


This fact check was conducted by University of the Philippines Vice President for Public Affairs, Prof. J. Prospero E. De Vera III, DPA. Vice President De Vera is a professor in Public Administration at the UP National College of Public Administration and Governance in UP Diliman.