DAVAO CITY — The Land Bank of the Philippine has announced that families in need of financial assistance to be able to continue sending their students to school amid health pandemic impact resulting to the current economic crisis, may now avail of a lending program recently rolled out by the Land Bank of the Philippines (Landbank) benefiting those from preschool to college who plan to enroll this coming school year.
This education-friendly program dubbed the Interim Students’ Loan for Tuition toward Upliftment of Education for the Development of the Youth (i-STUDY), will allow parents, guardians, or benefactors of students in private schools to borrow an amount equivalent to one school year, or two semesters –or up to PHP150,000 per student– according to a report by Landbank president-chief executive officer Cecilia Borromeo to Finance Secretary Carlos Dominguez III.
Borromeo said the i-STUDY program was introduced by Landbank “in response to President (Rodrigo) Duterte’s call for the institution to support students during this time of crisis.”
Loans under the program, which cannot exceed PHP300,000 per eligible borrower, carries an affordable fixed interest rate of 5 percent per year.
Short-term loans payable within one year are available for pre-school, primary, and secondary school students under the program, while term loans payable up to a maximum of three years, inclusive of a one-year grace period on the principal amount is available for tertiary level students.
“This program will not only help families who have kids they want to send to school, but will also assist private schools and downstream industries to sustain and continue their operations,” Borromeo said.
President Duterte earlier assured parents that he will open Landbank to them to assist in continuing the education of their children even amid the economic woes triggered by the coronavirus disease 2019 (Covid-19) pandemic.
Before the i-STUDY program, Landbank also launched in May this year a lending program targeting private schools hit hard by the Covid-19 crisis.
An initial batch of over 60 private educational institutions has expressed interest in tapping Landbank’s Access to Academic Development to Empower the Masses towards Endless Opportunities (ACADEME) lending program.
As of Aug. 19, the LANDBANK board chaired by Dominguez has approved the application under the ACADEME program of four institutions for loans with a combined amount of PHP330 million.
The PHP3-billion ACADEME program aims to extend credit to private high schools, private technical-vocational education training institutions, colleges, and universities with the goal of encouraging students to enroll under a “study now, pay later” setup by allowing their parents to issue promissory notes for their academic fees.
These promissory notes will then be refinanced or rediscounted under the program, with schools allowed to borrow as much as 70 percent of the sub-promissory note per semester and subject.
However, schools can only borrow up to a certain maximum amount based on the net borrowing capacity of the institution.
This lending program is available until June 30, 2021.
As of August 19, Borromeo said five schools have partially submitted their documentary requirements for the program, while six loan applications are up for approval during the September 2020 meeting of the Bank’s board and credit committee.
Submission of the documentary requirements is still pending for 18 other schools that have signified their intention to avail of the ACADEME lending program.
Another 32 schools across the country have likewise expressed interest in availing of the ACADEME facility, Borromeo said.
Loans under the program carry an interest rate of 3 percent per annum and are payable based on the maturity of the sub-promissory notes but not to exceed three years.
The private school
Vice President Enedicto G. Faune, head of Landbank Davao Lending Center in a letter Leo Tereso A. Magno, President and Chief Executive Officer of the Rizal Memorial Colleges (RMC), offered the bank’s loan package.
The Terms include “three percent (3%) per annum fixed up to maturity date and it is asking collateral from the school-either a real estate mortgage; hold out deposit among others.
The loan program is supposed to be a welcome development for everyone but the private schools are reluctant to take the offer citing the five percent interest per annum.
Magno, owner of four school campuses in the Davao region, in an interview with Newsline.ph said “We in the private schools, welcome the offer but we doubt it—it is not because we don’t trust the government, but we are worried of the interest, we carry the burden to pay the interest and we know that families will really send their child to school, but the burden of paying the interest is on us”.
Magno said in Davao City alone, private schools have yet to collect millions of tuition fees and other school fees from students who during the school year 2019-2020 “Truth is, almost every private school here still has collectible from students, but we are allowing them to enroll this year—because we know there is a crisis and we understand them- we need to provide them education”.
But, he said, paying the bank interest “Is too much for us”.
As it is now, Magno said the number of students enrolled for the school year 2021 has reduced by forty percent (40%) “But we get by, we are still good but if the pandemic and economic crisis prolong until middle next year school year 2021-2022 will be a big problem”.
The RMC which has been operating in various campuses outside Davao City has continuously supported the country’s educational system “We fully support the program especially President (Rodrigo) Duterte, in our own way, like allowing students with still unpaid school fees o enroll but taking another three compounded percent interest for a student loan—is another burden”.
He also suggests that the government should also look into the plight of the teachers “Teachers are paid per unit they have and with the decreased number of students, teacher loss number of units- which means either will be less number of units which will affect their income or they will not be given unit at all given the low number of enrollees”.
Will the government’s i-STUDY program succeed? We will know when the class opens on October 5.
In all these schemes, parents have one best option left-send their children to public schools where education is free. They only need to pay certain dues and but school materials—but the question is—WILL THEY GET QUALITY EDUCATION?
