Law Summary
Creation of the Students' Loan Fund Authority
- Creation of the Students' Loan Fund Authority under the Department of Education.
- The Authority is tasked with implementing the declared policy.
- It must be organized within 60 days from the Act’s approval.
- Principal office located in Manila.
Definitions
- "Authority" means the Students' Loan Fund Authority.
- "Scholarship grants-in-aid" cover matriculation and other school fees.
- "Education loans" cover expenses for books, subsistence, board, and lodging.
Powers, Functions, and Duties of the Authority
- Establish and promote programs generating funds for educational loans and scholarships.
- Coordinate grants from public and private agencies.
- Implement financing for needy and deserving students proportionally distributed according to population.
- Support granted until the completion of the course; no aid for repeated subjects due to failure or unjustified dropout.
- Prioritize courses based on national manpower needs.
- Conduct psychological and pedagogical tests for screening.
- Develop loan payment collection system; annual amortization capped at 15% of grantee’s income.
- Publicize the Authority’s work and scholarship opportunities.
- Research poverty’s effect on education and recommend solutions.
- Solicit donations and accept contributions exempt from taxation.
- Utilize resources of Department of Education and educational institutions.
- Issue necessary rules and regulations.
- Exercise additional powers to promote educational opportunities.
Executive Board Composition and Appointment
- The Board powers govern the Authority’s operations.
- Comprises 12 members including the Secretary of Education (Chairman) or Undersecretary (in absence).
- Includes representatives from state, sectarian, and non-sectarian universities, guidance personnel, national integration, labor, financing institutions, private sector, and student sector.
- Members appointed by the President with Commission on Appointments' consent.
- Student representative must be under 30 and serves a one-year term.
Term and Removal of Board Members
- Four-year terms for Board members.
- Removal only for cause; organizations may request change of representatives.
- Vacancies filled by Presidential appointment for unexpired terms.
Board Meetings
- Minimum of one meeting per month or as needed.
- Convened by Chairman or upon written request of at least three members.
Board Member Compensation
- Per diem of PHP 50 per meeting day, up to PHP 200 per month.
Authority Commissioners
- One Commissioner and one Deputy Commissioner appointed by the Board with Presidential approval.
- Must have educational administration experience (7 years) and a master’s degree or equivalent.
- Terms of nine years; removal only for cause.
- Commissioner salary equal to undersecretary level; Deputy Commissioner equal to bureau director.
Powers and Duties of the Commissioner
- Serve as Board Secretary and executive officer of the Authority.
- Implement Board policies, organize administrative machinery, and appoint personnel.
- Perform other Board-assigned functions.
Students’ Loan Fund
- Special fund administered by the Authority’s Executive Board.
- Finances educational loans and scholarships to qualified students.
- Fund sources include bond proceeds, donations, grants, appropriations.
Bond Issuance
- Authority may issue bonds up to PHP 50 million.
- Bonds bear 6% annual interest, maturity not exceeding 15 years.
- Bonds guaranteed by the Republic, tax-exempt, immune from seizure, acceptable as collateral.
- Sinking fund established for bond redemption.
Applicant Qualifications
- Filipino high school graduates.
- Must have at least an 80% general average.
- Certificate from high school principal qualifying for college; disputes referred to Department of Education.
- Affidavit of parental/guardian income < PHP 2,500 annually, and real estate not exceeding PHP 5,000 assessed value.
- Must submit study plan with timelines, expenses, and future plans.
- Must pass psychological and other exams administered by the Authority.
Loan Payment Terms
- Repayment starts after course completion and one year after employment.
- Interest at 6% per annum accrues upon employment.
Payment of Fees
- Scholarship grants paid directly to educational institutions, in cash or Authority bonds.
- Education loans payable to bookstores or boarding houses; subsistence allowance payable directly to students.
Appropriations
- Initial appropriation of PHP 200,000 for loans, PHP 100,000 for operating expenses (FY 1970).
- Subsequent appropriations included in General Appropriations Acts.
Repealing Clause
- All inconsistent laws or orders repealed or modified accordingly.
Effectivity
- Act takes effect upon approval.