The Department of Finance said over 80 private educational institutions have expressed interest in accessing the credit facility launched in May this year by the Land Bank of the Philippines (LANDBANK) to aid them in implementing their respective “study now, pay later” plans for students amid the financial constraints suffered by families as a result of the coronavirus-induced crisis.
As of July 1, the LANDBANK board chaired by Finance Secretary Carlos Dominguez III has approved the application of three institutions for loans with a combined amount of P260 million under the Access to Academic Development to Empower the Masses towards Endless Opportunities (ACADEME) lending program of the Bank.
The P3 billion ACADEME program was launched by LANDBANK last month to extend credit to private high schools, private technical-vocational education training institutions, colleges and universities with the goal of encouraging students to enroll under a “study now, pay later” setup by allowing their parents to issue promissory notes for the academic fees.
These promissory notes will then be refinanced or rediscounted under the program, with schools allowed to borrow as much as 70 percent of the sub-promissory note per semester and subject.
However, schools can only borrow up to a certain maximum amount based on the net borrowing capacity of the institution.
The lending program is available until June 30, 2021.
Cecilia Borromeo, Landban president and chief executive said that as of July 1, six schools have partially submitted their documentary requirements for the program, while one loan application will be up for approval when the Bank’s board and credit committee meet on the fourth week of July.
“We continue to pursue opportunities to offer these program to as many eligible schools as possible through various means available,” Borromeo said.
Borromeo said follow-through meetings are being undertaken by LANDBANK with 15 other schools to assist them in assessing their loan eligibility.
Another 61 schools across the country have likewise expressed interest in availing of the ACADEME facility, Borromeo said.
Loans under the program carry an interest rate of 3 percent per annum and are payable based on the maturity of the sub-promissory notes but not to exceed 3 years.
Borromeo said Landbank has been offering the program and explaining its benefits by arranging teleconferences with school administrators, distributing letters and brochures to potential borrowers, and through promotional efforts in the traditional and social media.
According to Landbank, institutions eligible under the ACADEME program include private junior and senior high schools with permits to operate from the Department of Education (DepEd) and private technical-vocational education training institutions regulated by the Technical Education and Skills Development Authority (TESDA).
Landbank said private colleges and universities can also avail of the program if they offer undergraduate programs authorized by the Commission on Higher Education (CHED).
Dominguez announced last month that this “Study Now, Pay Later” initiative was among the relief measures drawn up by the Duterte administration for sectors hit hard by the coronavirus pandemic’s economic fallout.