A Student’s Guide To The Free Tuition Fee Law

A Student’s Guide To The Free Tuition Fee Law

Poverty is major barrier for many students in the Philippines to pursue higher education. While not all who didn’t get the chance to finish tertiary education remained poor, earning a degree will at least give everyone a better shot at life.

In 2010, According to CHED’s data, two out of five high school graduates (or about 40%) did not proceed to college, due to the high cost of tertiary education. Despite costing just a fraction of private college and universities, State Universities and Colleges (SUC) are still inaccessible to the underprivileged population in the country.  


It’s a fact that education is the best way out of poverty, but due to the inaccessibility of higher education to the poorest population of the country, the poor gets stuck in its never ending cycle.

In his effort to bridge this gap between the poor and education, President Rodrigo Duterte signed “The Universal Access to Quality Tertiary Education Act” or Republic Act 10931 on August 3, 2017. The law aims to waive school fees to provide an opportunity for every Filipino to earn a higher education and a degree in SUCs and Local Universities and Colleges (LUC).

As the free tertiary education law finally sees the light of the day, the youth of today will have a chance for a brighter future.  Here’s what you need to know about the new law!

What does this law cover?

This law is an act promoting universal access to quality tertiary education by providing free tuition and other school fees in state and local universities and colleges, as well as state-run technical vocational institutions.

Despite limiting the free tuition fee to SUCs and LUCs, the law also puts into place financial assistance for students who are and will be enrolled in private institutions or for those who will be taking post-secondary degree education. These programs are in a form of subsidy and student loans, which the student needs to apply for first.

How and where to avail free tuition fee?

For students studying in SUCs and LUCs, the tuition fee is automatically waived. However, the students must first meet the basic requirement of the bill as follows:

Who is the free education program for?

  • All Filipino students who are currently enrolled for a bachelor’s degree, certificate degree, or any comparable undergraduate degrees in any SUCs and LUCs.
  • Filipino students who will be enrolled moving forward.  

Eligibility

This law may provide free tuition fee for everyone, but it doesn’t mean it comes easy. To be granted with this privilege, the student must fulfill the basic requirements such as the following:

  • Passed the entrance examination and other admission and retention requirement in their preferred SUC or LUC.
  • The student must have not completed any degree from any higher education institution, public or private.

Non-SUC and LUC education

Apparently, the free tuition only extends to government-funded educational institutions, such as SUCs and  LUCs. However, students who prefer studying in private institutions or are pursuing a secondary undergraduate degree are provided with a different program, which is also mandated by this law.

Tertiary Education Subsidy (TES)

This is another program under the free education law which will provide assistance to all Filipino students who shall enroll in undergraduate post-secondary programs of SUCs, LUCs, private Higher Education Institutions (HEIs), and all Technical Vocational Institutions (TVIs) the cost of tertiary education or any part or portion thereof.

What does TES cover?

First of all, TES is made to fund tertiary education of a student. However, the funding from this government agency also can be used for the following purposes:

  • Tuition and other school fees in private HEIs, and private or Local Government Unit (LGU) operated TVIs, which shall be equivalent to the tuition and other school fees of the nearest SUC or state-run TVI in their respective areas.
  • An allowance for books, supplies, transportation and miscellaneous personal expenses, including a reasonable allowance for the documented rental or purchase of a personal computer or laptop, and other related personal expenses.
  • An allowance for room and board costs incurred by the student.
  • For a student with a disability, an allowance for expenses related to the student’s disability, including special services, personal assistance, transportation equipment, and supplies that are reasonably incurred.
  • For a student in a program requiring professional licensure or certification, the one-time cost of obtaining the first professional credentials or qualifications.

Eligibility

Priority shall be given to students who are part of households included in the Listahanan 2.0 ranked according to the estimated per capita household income. Students who are not part of Listahanan 2.0 will be ranked based on their submitted documentation of proof of income.

For your information

Listahanan 2.0 refers to the information management of the Department of Social Welfare and Development that identifies the country’s poorest. Such prioritization, however, shall not apply to Filipino students in areas with no existing SUC or LUC campus.

Student loan program

Another financial assistance that will be administered by UniFAST is the student loans. This program is extended to all Filipino students enrolled or planning to enroll in private HEIs or post-graduate studies. This student loan program offers two types of loans: short- and long-term.

UniFAST’s student loans is tied in to Social Security System’s (SSS) educational loan, where the interest rate is 6% annually.

For short-term loans, the term is up to five years for degree courses while three years for vocational and technical course.

Short term loans
Degree courses5 years term
Vocational and technical courses3 years term

On the other hand, the long-term loan is discretionary, depending on the student borrower’s salary.  For students or parents who don’t have access to bank loans that could finance the entire cost of a semester in private tertiary institutions,  this is a good alternative.
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Sample computation for long term loan

Degree courseBS in Education
Duration of study4 years
Loan amount₱50,000
Interest rate6% per annum
Term36 months
Repayment₱1,723/month
Loan interest incurred₱12,028

Repayment

Payment of the loan amount shall begin once the beneficiary secures any gainful employment with compensation, remuneration or earnings that reaches the Compulsory Repayment Threshold. Repayment of the loan amount or a percentage thereof will be incorporated in the person’s monthly Social Security System (SSS) or Government Service Insurance System (GSIS) contribution.

For short term loans,  the repayment shall start after 18 months for semestral courses, 15 months for trimestral courses or 14 months and 15 days for quarter term courses from the scheduled last release date or from the date of last release for those who will not avail of the subsequent releases.

Semestral courses 18 months from the release date
Trimestral courses 15 months from the release date
Quarter term courses 14 months and 15 days from the release date

For long term loans, the repayment can be voluntary and can start anytime the loan borrower wants to pay even before finishing the course or having gainful employment. Should the student start paying the loan through his or her income, SSS or GSIS will automatically deduct the student loan repayment together with his or her monthly contribution.

Another means of repaying the loan is for a student borrower to render service such as teaching and research among others.

Employment assistance

Through Department of Labor and Employment (DOLE), the government will endeavor to prioritize student borrowers in facilitating employment after finishing their higher or technical education.

Implication to the economy

This law that champions free tertiary education may be unloading a huge burden off the students’ and their parents’ pockets, but in turn, the government will be stretching its budget further to finance it.

According to this breakthrough legislation, this program which covers about 984,000 SUC students in 2018 is bound to cost the government ₱10.486 billion in tuition alone. The miscellaneous expenses will cost about ₱6 billion in miscellaneous expenses.

This is indeed a crucial government policy which could eventually liberate a huge number of Filipinos from the chains of poverty. However, it is an additional responsibility of the government to fund this law moving forward. Its long-term benefits greatly outweigh the short-term budgetary challenges, which is what the administration is currently weaving together.

This is where government initiatives become relevant and creates an impact to the economy and people. Certain measures will have to be made in order to generate income for this new law. The country’s resources will be spread thinner, and people may have to pay bigger taxes and other areas of development may take a back seat like infrastructure or less prioritized government initiatives. Right now, these are possibilities as the government has not found a primary source of funding for this law.

According to the Deputy Executive Secretary Manardo I. Guevarra in an interview, President Duterte is currently looking at different ways to help fund the initiative, including borrowing through official development assistance as well as donations.

One viable source of funding for this law is Philippine Amusement and Gaming Corporation (PAGCOR). After all, during his thanksgiving party last year in Davao, Duterte committed to allocating all of the PAGCOR earnings to health and education. This year, PAGCOR alone managed to generate ₱14 billion in the first quarter of this year.

At the moment though, the funding won’t be needed until school year 2018 since there was already an Executive Order that covered the fees for this school year. What matters right now is that this bill has finally been turned into a law – that alone is one of the biggest victories that our country has achieved.

With this new law finally getting rolled out, coupled with the Executive Order on free tuition fees (effective this year’s school year) for all state universities in the country which was allocated with a budget of ₱8.3 billion, the education landscape in the Philippines is brighter than ever. It may bring about a lot of short-term budgetary challenges, but its long-term benefit to the country as a whole will ripple through generations.

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