PIDS study prescribes expanded coverage of government’s loan program for college students

To help more young Filipinos obtain a college degree, the Commission on Higher Education (CHED) should improve student loans, according to a study released by the Philippine Institute for Development Studies (PIDS).

In a PIDS discussion paper, former National Economic and Development Authority (Neda) Director General Dante B. Canlas said many Filipinos fail to enroll in college because of financial constraints.

“It is seen that the income gap between college and high-school graduates has been widening as a result largely of increasing labor-market demand for skills,” Canlas said.

“Investment in college education is, thus, a worthy undertaking. But since households finance college education out of their own pockets, in the absence of credit markets for higher education, only the ones with initial wealth endowments can afford college education,” he added.

Canlas said student loans can encourage students to be more diligent in their studies and conscious about looking for quality jobs that will enable them to repay their loans.

The former Neda chief said the CHED must lead the legislation of a national loan program for student.

He said a grant mechanism for state universities and colleges (SUCs) must be built into the program.

Canlas said if SUCs are able to institute loan programs with minimal loan defaults, these SUCs must be rewarded with more grants.

However, if some SUCs incur large loan defaults, the eligibility of the SUCs for the loan program will be withdrawn or suspended.

Further, Canlas said the national government can make student loans admissible as tax credit in terms of paying income taxes.

“The government has a warranted role to play amid absent markets for college-education loans. Some needs are not met, with foregone human welfare,” Canlas said.

Apart from loans, Canlas said the CHED can also help determine the budget allocations for SUCs per region and set content standards in core courses and subjects.

He added that the CHED can also devise standardized tests for determining compliance with content standards of both public and private higher-education institutions (HEIs).

Citing data from the Philippine Statistics Authority (PSA), Canlas said Filipinos with college degrees earn better than those who only finished their secondary or primary education.

PSA data showed, Canlas said, that in food manufacturing, the monthly wage of food technologists is about twice that of unskilled workers.

Canlas added that in wholesale and retail trade, the wage ratio for professionals to unskilled workers is more than twice.

In computer programming, he added, the wage ratio for electronics engineers to unskilled is about four to seven times.

“In several occupation groups, the wage of the top group is at least twice that of the unskilled workers’ wage,” Canlas said.

Too early to protest tuition hike

In a related development, CHED Chairman Patricia B. Licuanan, in response to “premature protests” staged by students regarding the rising costs of higher education in the country, clarified in a statement that “it is too early in the year to be able to determine the number of HEIs that will increase tuition and/or other school fees.”

According to Licuanan, HEIs have until end of February to comply with the consultation process as stipulated in the CHED’s guidelines governing tuition and other school fees.

The HEIs are given until April 1 to submit duly notarized documentary requirements to their CHED regional office should they decide to increase fees.

“Only then can realistic numbers be determined,” Licuanan said.

Licuanan also assured that the CHED will carefully assess the proposed increases, ensuring that colleges and universities will comply with the guidelines before enforcing higher tuition fees.

“The CHED will ensure that HEIs meet the guidelines provided by law and adhere strictly to requirements that seek to make tuition increases transparent, reasonable and affordable,” she stressed.

Earlier, the Kabataan Party-list and the National Union of Students of the Philippines claimed about 400 colleges and universities are planning to increase tuition for the academic year 2016-2017. –Cai Ordinario, Businessmirror

(With PNA)