The Social Security System (SSS) has released a total of P719.86 million in “study-now, pay later” loans for student-beneficiaries of more than 38,000 member-borrowers who had availed themselves of the SSS Educational Assistance (Educ-Assist) Loan Program since its launch in 2012.
SSS President and Chief Executive Officer Emilio S. de Quiros, Jr. said the Educ-Assist program, which is a joint project of the SSS and the national government (NG) involving a P7 billion amount funded on a 50:50 basis, provides loans at affordable terms for tuition and miscellaneous fees for college, vocational and technical courses. It has funded the education of 39,970 students as of July 31, 2013.
“The Educ-Assist program helps ease the financial worry that parents and family breadwinners face during school enrollment,” he said. “With the coming second semester enrollment, we encourage SSS members to consider the Educ-Assist facility as a financing option for their loved ones to gain wider access to education and better job opportunities, as the grant of the program shall be made available until the entire fund has been fully allocated.”
SSS members can borrow up to P20,000 for college and P10,000 for vocational or technical (voc-tech) courses every semester or trimester until the beneficiary graduates. A total of 37,947 college students comprise the bulk of Educ-Assist beneficiaries, who were granted a total of P700.71 million in loans, while an additional P19.15 million was released for 2,023 students enrolled in voc-tech courses.
“The loan beneficiaries can be the members themselves, as well as their legal spouse and children. Married members can borrow for up to two beneficiaries, while unmarried members can use the loan for the education of their sibling, including their half-brother or half-sister,” de Quiros said. “Most often, the chosen beneficiary is the child of the SSS member.”
Initial availments, or funds released to first-time Educ-Assist borrowers, reached P563.76 million, while subsequent availments, or loans disbursed to repeat borrowers, totaled P156.10 million. Nearly a quarter of the 38,263 total borrowers as of July 2013 have at least one subsequent availment.
“Members benefit from Educ-Assist’s low interest rate of only six percent per annum for the SSS portion, which will be based on the diminishing principal balance until full payment, while the NG’s portion carries zero interest,” de Quiros said.
The repayment period is up to five years for loans used for college degree programs and up to three years for voc-tech courses. Loan repayment will only start one year after the date of graduation or the date of last loan release for those who will not avail of the subsequent loans. A monthly penalty of one percent will be charged for any unpaid amortization.
The Educ-Assist program is open to members with at least 12 monthly contributions, one of which should be within the last three months prior to the date of application. Since theis aimed at low-income earners, members must have an actual basic salary of P25,000 or below per month to be eligible for the program.
Members should also have updated salary or housing loan payments, although those with overdue accounts must not have over three unpaid monthly amortizations, de Quiros added. The loans are released as checks made payable to the school where the beneficiary is enrolled and are sent to member-borrowers thru registered mail.