Did the Commission on Higher Education (CHEd) just slam the door shut on poor students eager to enter college or continue their studies after finishing the K-12 basic education program?
That seems to be what the agency has done with its decision to stop its Study Now, Pay Later Program.
Reason: the “extremely low” payment rate for student loans.
According to the agency, the government has been forced to resort to the extreme measure because most of those who availed themselves of the program were not able to get jobs after graduation, therefore could not make enough money to pay off their loans.
As CHEd chair Prospero de Vera explained it during a recent hearing by the Senate Committee on Higher, Technical and Vocational Education: “The payment rate was extremely low. It was less than 10 percent.
“The government was unable to collect because after the students graduate, government has been unable to go after them anymore because if they don’t get jobs after they graduate, how can they pay their loans?”
The CHEd has stopped the Study Now, Pay Later Program, he said, because it had turned into a “Study Now, Pay Never Program.”
We recall that back in 2020, the state pension fund Government Service Insurance System (GSIS) opened a P20-billion study-now, pay-later loan program for the college education of children of GSIS members.
This was intended to help families facing hard times because of the effects of the COVID-19 pandemic to continue the education of their college-level children.
The loan proceeds are directly paid to the school under the student’s account every semester or trimester until the beneficiaries finish their courses.
The GSIS loan program has a term of 10 years but it does not require beneficiaries to pay anything in the first five years.
We do not know if the GSIS student loan program is succeeding in achieving its objectives two years later.
What we do know, based on CHEd’s admission, is that its own loan program has failed miserably as only 10 percent of the recipients of the loan program have defaulted for one reason or another, but quite possibly due to their dire economic circumstances even after graduation.
But even if CHEd has decided to stop its Study Now, Pay Later Program that it concedes has turned into a bottomless money pit for the government, there’s still the P1 billion that it has allocated for cash-strapped students under the Unified Student Financial Assistance System for Tertiary Education or Unifast.
But wait. Senator Risa Hontiveros recently asked the Senate to investigate CHEd for P7 billion “questionable releases” under Unifast.
We hope CHEd can adequately explain this.
After all, funds intended to help students from poor families finish their studies should be judiciously used in keeping with the constitutional injunction for the State to “establish and maintain a system of scholarship grants, student loan programs and other incentives which shall be made available to deserving students in both public and private schools, especially to the underprivileged.”
