Government Support for Private Education

Criteria governing grant eligibility

Student assistance programs must be based on a set of criteria including: (a) tuition fees, (b) socio-economic needs of each region, (c) overall performance of the schools, (d) academic qualifications, and (e) financial needs of the students (Section 3).
Within a reasonable time determined by the State Assistance Council, Private Education Student Financial Assistance Program (PESFA) student grantees must be enrolled in schools with accredited programs or applying for accreditation as determined by the Federation of Accrediting Agencies of the Philippines, namely: the Philippine Association of Accredited Schools, Colleges and Universities, the Association of Christian Schools and Colleges Accrediting Agency, and the Philippine Association of Colleges and Universities Commission on Accreditation (Section 3).
Preference is given to students whose family income is not more than thirty six thousand pesos (P 36,000) or such amount as may be determined by the Council (Section 3).
Assistance to students in private post-secondary education extends to students of community colleges and students in non-degree programs, including vocational and technical courses, and implementation encourages students to undergo tertiary education in the same region where their families reside (Section 3).
An “underprivileged student” for purposes of this Act is a student whose annual gross income (if any) and the combined annual gross income of his parents do not exceed P 36,000 (Section 8).

Forms of government assistance

Assistance to private education consists of the following components (Section 4):
- Tuition fee supplements for students in private high schools, including students in vocational and technical courses.
- High School Textbook Assistance Fund.
- Expansion of the Educational Service Contracting (ESC) Scheme.
- Voucher system under the PESFA program.
- Scholarship grants to students graduating as valedictorians and salutatorians from secondary schools.
- Tuition fee supplements to students in private colleges and universities.
- Education Loan Fund.
- College Faculty Development Fund.

Tuition fee supplements for private high school

Financial assistance for tuition for students in private high schools is provided by government through a voucher system (Section 5).
For students enrolled in schools charging less than P 1,500 per year in tuition and other fees during school year 1988-1989 (or such amount as the Council may determine in subsequent years), the government provides a voucher equal to P 290.00 (Section 5(1)(a)).
Students must pay in school year 1989-1990 tuition and other fees equal to the tuition and other fees paid during the preceding academic year (Section 5(1)(b)).
Schools must be reimbursed for the vouchers within sixty (60) days from the close of the registration period (Section 5(1)(c)).
Eligibility is conditioned on the student’s family residing in the same city or province where the high school is located, unless the student enrolled in that school during the previous academic year (Section 5(1)(d)).
For students enrolled in schools charging above P 1,500 per year in tuition and other fees during school year 1988-1989 (or such amount as the Council may determine in subsequent years), no tuition fee assistance is granted by the government (Section 5(2)).
Schools may raise tuition fees subject to Section 10 (Section 5(2) proviso).
Subsidized tuition fee amounts and tuition fee increases are conditioned so that seventy percent (70%) of the amount subsidized allotted for tuition fee or of tuition fee increases must go to payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel except administrators who are principal stockholders of the school, and may cover increases as provided for in collective bargaining agreements existing or in force when the Act is approved and made effective (Section 5).
Government subsidies are prohibited from being used directly for salaries of teachers of non-secular subjects (Section 5).
At least twenty percent (20%) must go to improvement and costs of operation covering modernization of buildings, equipment, libraries, laboratories, gymnasia and similar facilities, and payment of other costs of operation (Section 5).
Schools must maintain a separate record of accounts for all assistance received, any tuition fee increase, and the detailed disposition and use thereof, and must make this record available for periodic inspection during business hours by the faculty, non-teaching personnel, students, the Department of Education, Culture and Sports (DECS), and other concerned government agencies, as determined by the State Assistance Council (Section 5).

High school textbook assistance fund

A High School Textbook Assistance Fund is established in the DECS to give assistance on a per student basis to private schools charging less than P 1,500.00 for 1988-1989 per year (or such amount as the Council determines in subsequent years) (Section 6).
The fund is exclusively for the purchase of high school textbooks in support of the implementation of the Secondary Education Development Program (Section 6).
The fund is prohibited from being used for the purchase of books that will advance or inhibit sectarian interest (Section 6).
Textbooks purchased must be included in the list approved by the DECS (Section 6).

Educational Service Contracting expansion

The DECS must continue entering into contracts with private schools where the government shoulders the tuition and other fee of excess students in public high schools who enroll under the program (Section 7).
The DECS must settle all outstanding obligations before contracting new obligations (Section 7).
The DECS must also enter into contracts with private schools in communities with no public high schools, where the government shoulders the tuition and other fees of students who enroll (Section 7).
The number of assisted schools in communities without public high schools must increase every year such that all schools in this category are assisted within four (4) years from the promulgation of this Act (Section 7).
Government assistance under this Section is capped so it must not exceed the amount determined as the per student cost in public high schools (Section 7).
The Department must fully pay the subsidized amount to participating schools not later than the end of the school year, unless delay is attributable to the participating schools (Section 7).
Assistance must be allocated and distributed among the fourteen (14) regions in proportion to total population and high school age population for the first school year (Section 7).
Starting school year 1990, an equalization scheme must be implemented by the State Assistance Council (Section 7).

PESFA vouchers and tuition waivers

The existing Private Education Student Financial Assistance (PESFA) program is expanded so that a minimum percentage of all enrolling first-year students can benefit from full or partial scholarship plus an allowance (Section 8).
The minimum PESFA coverage percentages are: 10% for school year 1989, 15% for school year 1990, 20% for school year 1991, 25% for school year 1992 and thereafter (Section 8).
PESFA financial assistance is granted to deserving underprivileged students selected based on family income, geographic spread, and results of competitive examinations given by the DECS to students in all secondary schools (Section 8).
The program must be equitably allocated to provinces and cities according to regional and national plans to priority courses determined by the DECS in coordination with the National Economic Development Authority (NEDA) (Section 8).
The priority courses must be submitted to Congress at the start of the program, and changes must be submitted periodically (Section 8).
Tuition waivers are required for private colleges and universities: full or half tuition waivers must be provided for five percent (5%) of entering freshmen (Section 8).
Tuition waivers for the 5% include valedictorians and salutatorians of both public high schools and private high schools charging less than P 1,500 per student per year as of school year 1988-1989 (or such amount as the Council determines in subsequent years) (Section 8).
Valedictorians and salutatorians eligible for tuition waivers must meet admission tests and retention requirements of the concerned school (Section 8).
For tuition waivers, tuition rates for entering freshmen in all private schools and colleges may be determined by the school itself after consultations with parents, students, and alumni; audited financial statements must be made available to authorized representatives of these sectors (Section 8).
Valedictorians covered by the tuition waiver requirement may receive government allowances in addition to the school tuition waivers, subject to rules of the State Assistance Council, provided they enroll in priority courses (Section 8).
Where the graduating class is composed of more than two hundred and fifty (250) students, all salutatorians and first honorable mention graduates may also be entitled to the allowance granted to valedictorians (Section 8).

Further assistance for college non-freshmen

The government provides tuition fee supplements for non-freshmen students of private colleges and universities in priority course programs determined by the DECS through a voucher system (Section 9).
For re-enrolling students in priority programs in schools charging an effective per-unit tuition rate of P 80 or less per unit (or such amount as the Council determines in subsequent years), the government provides a voucher value equivalent to the tuition fee increase (Section 9(a)).
Schools where the effective per-unit tuition rate is P 80 or less may not raise their fees by more than P 12.00 per unit for both priority and non-priority courses (Section 9(a)).
Assistance for this voucher category applies only to students who have completed one academic year by June 1989 in priority programs and does not apply to future college students and to current college students who transfer outside their region (Section 9(a)).
For students in schools charging an effective per-unit tuition rate of more than P 80 per unit (or such amount as the Council determines), the government provides no assistance, and schools may determine their own tuition rates subject to Section 10, provided they grant full or half tuition waivers to five percent (5%) of all students (Section 9(b)).
Schools with accredited programs charging less than P 80.00 per unit (or such amount as the Council determines) may continue to determine tuition rates and, subject to Section 10, non-freshmen students in accredited priority courses are entitled to a voucher equivalent to the tuition increase under the voucher structure used for the P 80 or less category (Section 9(c)).
Assistance and tuition increases under Section 9 follow the same conditions as those imposed for tuition and voucher assistance under Section 5(2) (Section 9).

Tuition increase consultation and arbitration

Every proposed increase in tuition fee requires consultations by the school administration with the duly organized parent and teachers associations and faculty association for secondary schools, and with student governments or councils, alumni and faculty associations for colleges (Section 10).
Consultations must involve availability of audited financial statements to authorized representatives of the concerned sectors (Section 10).
Schools must exert every effort to reconcile differences during the consultation process (Section 10).
In case of disagreement, the alumni association of the school or any other impartial body chosen by the stakeholders acts as arbitrator (Section 10).

Education loan fund and related social financing

The “Study Now, Pay Later plan” creates a special fund known as the Students Loan Fund administered by the DECS, or by delegation, the Student Loan Fund Authority created under Republic Act No. 6014, which is reinstituted under the same Republic Act (Section 11).
The Students Loan Fund finances educational loans covering matriculation and other school fees and educational expenses for books, subsistence, and board and lodging (Section 11).
Payments covering tuition, matriculation and other school fees must be paid directly to the school concerned (Section 11).
A loan must be paid by the student-debtor after completion of the course or profession for which loan proceeds were expended, but only after a period of two (2) years from the time the borrower acquires an employment (Section 11).
Interest on the balance may accrue at a rate of not more than twelve percent (12%) per annum (Section 11).
The Social Security System Fund must make available low interest educational loans to its members and to private educational institutions for school building and/or improvement of their plants and facilities (Section 11).

Limits on student eligibility benefits

The right of any student to avail of benefits under this Act does not apply if the student fails for one (1) school year in the majority of the academic subjects enrolled during the course of study, unless the failure is due to some valid cause beyond his control (Section 12).
The right does not apply if the student enrolls for the first time, or transfers, outside the region where he is domiciled, unless the course sought is a priority course determined by the DECS and is not offered in any private school in his region (Section 12).

College faculty development fund

A College Faculty Development Fund is established in the DECS to improve the quality of teaching in higher education by providing scholarships for graduate degrees and non-degree workshops or seminars for faculty members in private colleges and universities (Section 13).
Faculty scholarship recipients must render three (3) years return service for every year of scholarship availed of (Section 13).
Scholarships must be in priority courses determined by the DECS in coordination with NEDA (Section 13).
Scholarships cannot be awarded to promote or inhibit sectarian purposes (Section 13).

Program administration and State Assistance Council

The State Assistance Council provides policy guidance and direction, and performs monitoring and evaluation of new and existing programs, and promulgates rules and regulations; the DECS performs day-to-day administration and program implementation (Section 14).
The DECS may engage qualified government or private entities for program implementation (Section 14).
The State Assistance Council is headed by the Secretary of Education, Culture and Sports as chairman (Section 14).
Council membership includes representatives from NEDA, DBM, DOST, and representatives from duly organized nationwide associations of teachers, students and school administrators (Section 14).
The last three (3) members must be appointed by the President upon recommendation of their respective sectors for a term of four (4) years (Section 14).
The Council meets as needed to assess program effectivity and ensure recipient schools provide quality education (Section 14).
The Council establishes criteria, including accreditation status, to determine which schools, colleges and universities may continue to enroll recipients (Section 14).

Appropriations and funding caps

DECS appropriations authorized in the General Appropriations Act for Fiscal Year 1989, Republic Act No. 6088, are reduced as far as practicable by region on a proportionate basis to fund requirements of Republic Act No. 6728 for Fiscal Year 1989 (Section 15).
Savings from other DECS appropriation items may be utilized for implementation in Fiscal Year 1989 (Section 15).
Any deficiency must be taken from the following sources (Section 15):
- Portions of coconut levies authorized under Republic Act No. 6260 and Presidential Decree No. 1468 and other laws earmarked to finance scholarships for deserving children of coconut farmers, and the income thereof, used exclusively for that children’s program including books, board and lodging, and other allowances when not provided in a particular program.
- Twenty percent (20%) of travel tax and airport departure tax collections.
- Ten percent (10%) of funds collected by the Sugar Regulatory Administration or the Philippine Coconut Authority for students in provinces where collected.
- Ten percent (10%) of the net income of the Development Bank of the Philippines.
- Portions of the Overseas Welfare Fund to benefit dependents or children of overseas worker.
- Any other lump sum appropriations or collections under supervision and control of the Office of the President.
The total amount made available to carry out the Act for Fiscal Year 1989 must not exceed Five hundred million pesos (P 500 M) (Section 15).
For later years, amounts necessary for continued implementation must be included in the annual General Appropriations Act (Section 15).
The per-student assistance amount determined under Section 5(a) and (b) and Section 9(a) remains the same for subsequent years unless Congress provides otherwise (Section 15).

Penalties and tuition-fee compliance sanctions

If an institution violates provisions of the Act or rules and regulations issued pursuant to it, the DECS, upon the recommendation of the Council, may bar the institution from participating in or benefiting from the program and from other DECS programs (Section 16).
Bar action is without prejudice to administrative and criminal charges against the school and/or its responsible officers under existing laws (Section 16).
A school that refuses to furnish copies of its audited financial statements as required for consultations prior to tuition fee increases under Section 5(1)(c), Section 8(b), and Section 9(b) forfeits the right to increase tuition fees, in addition to other penalties or sanctions that may be imposed under the Act or existing laws (Section 16).

Repeal, separability, and effectivity

All laws and decrees, particularly Presidential Decree Nos. 932 and 1371, and any letters of instruction, rules and regulations or parts thereof inconsistent with Republic Act No. 6728 are repealed or modified accordingly (Section 17).
If any provision is declared unconstitutional, the invalidity does not affect the validity and effectivity of other provisions not affected (Section 18).
The Act takes effect immediately upon its publication in English in an English newspaper and in Filipino in a Filipino newspaper, both of general circulation (Section 19).