State-run Land Bank of the Philippines, the country’s fourth-largest lender in terms of assets, said Monday it rolled out an educational loan program to help students continue going to school despite the coronavirus-induced health and economic crisis.
LandBank president and chief executive Cecilia Borromeo said in a report to Finance Secretary Carlos Dominguez III, who is also the bank’s board chairman, the Interim Students’ Loan for Tuition toward Upliftment of Education for the Development of the Youth or i-STUDY would benefit students from preschool to college who would enroll this school year.
The program will allow parents, guardians or benefactors of students in private schools to borrow an amount equivalent to one school year or two semesters—or up to P150,000 per student.
LandBank introduced the program in response to President Rodrigo Duterte’s call on the institution to support students during the crisis.
Loans under the i-STUDY program, which cannot exceed P300,000 per eligible borrower, carries an affordable fixed interest rate of 5 percent a year.
Short-term loans payable within one year are available for pre-school, primary and secondary school students under the program, while term loans payable up to a maximum of three years, inclusive of a one-year grace period on the principal amount are available for tertiary level students.
“This program will not only help families who have kids they want to send to school, but will also assist private schools and downstream industries to sustain and continue their operations,” Borromeo said.
Duterte earlier assured parents that he would open LandBank to them to assist in continuing the education of their children even amid the current health and economic crisis.
Borromeo also said an initial batch of over 60 private educational institutions expressed interest in tapping LandBank’s Access to Academic Development to Empower the Masses towards Endless Opportunities or ACADEME lending program that was launched earlier this year.
The LandBank board approved the application under the ACADEME program of four institutions for loans with a combined amount of P330 million as of Aug. 19.
The P3-billion ACADEME program aims 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 their 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.
Schools, however, 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.