Landbank president and chief executive officer Cecilia Borromeo
MANILA – Five private schools around the country have received a total of PHP350 million worth of loan from the Land Bank of the Philippines (Landbank) to allow them to extend a “study now, pay later” program.
In a reply to questions from the Philippine News Agency, the state-owned bank said seven loan applications are in the pipeline, while seven school-borrowers are completing documentary requirements for the Access to Academic Development to Empower the Masses towards Endless Opportunities (ACADEME) loan program.
The 14 schools have yet to submit the loan requirements, while 34 others have indicated intentions to avail of the lending program.
Landbank has allocated PHP3 billion for the ACADEME lending program in a bid to provide funding for private junior and senior high schools that are accredited by the Department of Education (DepEd), the Commission on Higher Education (CHED), and the Technical Education and Skills Development Authority (TESDA).
Under the program, private education institutions may apply for the lending program by submitting the promissory notes of their students, or their parents for rediscounting or refinancing.
The schools may borrow up to 70 percent of the amount of the promissory notes on a per semester basis, although this still depends on the maximum amount based on the school’s net borrowing capacity.
The loan program, which is available until June 30, 2021, has a fixed 3-percent annual interest rate payable on the maturity of the sub-promissory notes, but this should not exceed three years.
Earlier, Landbank president and chief executive officer (CEO) Cecilia Borromeo said under this program, students will be given a zero-percent interest loan but its term will depend on the agreement between the school and the student or their parents.
She said they have adopted a 3-3-3 feature for this lending program, referring to the PHP3-billion allocation, 3-percent fixed interest rate per annum, and three-year maximum maturity for sub-promissory notes that the schools will submit to Landbank.
Borromeo said the lending program was launched in the first week of May “because we know that there will be people who will have difficulty financing their kids’ education.”
Most schools in the country normally start the school year in June but some do it in September.
For this school year, however, the Department of Education (DepEd) postponed the school opening to August, then to October, to give teachers and schools additional time to prepare for the blended learning of students which is being adopted to address the impact of the pandemic.
Some schools, on the other hand, have pushed through with starting classes last August.
Meanwhile, another education-related lending program that is in the pipeline is the Interim Students’ Loan for Tuitions towards Upliftment of Education for the Development of the Youth (I-STUDY).
Landbank has allocated PHP1.5 billion for this program that will be implemented for the school year 2021-2022.
Parents or guardians of students may borrow up to PHP150,000 per student, which is equivalent to one school year or two semesters, but not more than PHP300,000 per eligible borrower.
This loan program has a fixed annual interest rate of 5 percent for short-term loans, or for those borrowing for pre-school, primary, and secondary students’ education, and is payable within one year.
Loans that will be utilized for tertiary education will have a maximum term of three years.
Landbank said it continues to promote this loan program “to provide financial assistance to parents, guardians, or benefactors to send their children to school, as well as assist private schools and downstream industries to sustain and continue their operations.”
“We are looking forward to service qualified availers under this program soon,” it added. (PNA)
