State-run Social Security System (SSS) has relaxed some of its rules for educational loan to help more college and vocational-technical (voc-tech) course students to meet their financial requirements for enrollment.
Emilio de Quiros Jr., SSS President and Chief Executive Officer said that members earning P25,000 and below per month are now eligible for the pension fund's SSS Educational Assistance Loan Program (Educ-Assist loans).
SSS previously required members to have at least P15,000 monthly income to qualify for the loan.
"Members can now borrow up to P20,000 per semester or trimester, up from the previous limit of P15,000 for college degrees. For voc-tech courses, we likewise increased the maximum loanable amount to P10,000 from the previous cap of P7,500 per semester or trimester," de Quiros said.
Currently, SSS has allotted P7-billion for its SSS Educ-Assist program. Of the amount, P3.5 billion was from the national government, while the remaining P3.5 billion in SSS counterpart funding.
SSS said the loan must be used to pay for tuition and miscellaneous fees and are intended to help students from low-income families.
Loan beneficiaries can be the SSS members themselves or their children, while unmarried members can designate their siblings, including their half-brother or sister.
Another significant change is the relaxed contribution requirement, under which SSS members with a minimum of 12 posted contributions, including at least one paid contribution within the past three months prior to the date of application, are now allowed to borrow. Members without any contribution for the past three months can pay and present the proof of payment to SSS.
In the past, a member must have at least 36 monthly contributions, three of which should be within the 12-month period before the application date, to qualify.
"The SSS has disbursed over P195 million so far in Educ-Assist loans to thousands of student-beneficiaries all over the country. We have already earmarked about P590 million, or 11 percent of the total fund allocation, for these students so that they can complete their chosen course, and we expect availment to increase further as a result of the revised guidelines," De Quiros said.
Loan repayment is also not burdensome as it will only start one year after the beneficary's graduation or the date of last loan release. Borrowers for college degree programs have five years to repay the loan, while those who borrowed for voc-tech courses are given three years, he added.
Half of the loan amount will be taken from the NG share and the other half from SSS. The SSS portion carries an interest rate of six percent per annum based on diminishing principal balance until full payment while the NG share has zero interest, for a "blended" annual interest rate of about three percent.