SSS sets salary cap for educational loans

MANILA, Philippines - The Social Security System (SSS), the state-run provident fund for private employees, said yesterday that only members earning up to P10,000 a month can tap its new P7-billion educational loan window.

SSS officer-in-charge Edgar Solilapsi said this is among the conditions for the so-called Educational Assistance Loan Program or (EALP) of the agency. The new program aims to help members’ cope with rising educational costs for college, vocational and technical courses.

“The program aims to boost the country’s socio-economic growth by developing a larger pool of competent professionals and skilled workers. It will also help workers upgrade their knowledge and skills to secure better jobs and provide a brighter future for their family,” Solilapsi said.

He said members with at least 36 contributions – including three monthly premiums within the past 12 months – are eligible to borrow for educational expenses of one beneficiary. The member must also be paying premiums based on a monthly salary credit of P10,000 or lower.

“The beneficiaries can be the SSS members themselves, legal spouses or children. Unmarried members can use the loan for the education of their siblings,” Solilapsi said.

For college courses, members may avail of a maximum loan of P15,000 per semester or trimester and P7,500 for a vocational or technical course, which must be a degree program of at least two years or more.

Loan releases will be made payable to the school and must be used for tuition and miscellaneous fees only. The school must be accredited by the Commission on Higher Education or the Technical Education and Skills Development Authority.

Depending on the courses, members have three to five years to repay the loan.

Of the P7-billion educational loan fund for private sector workers, the National Government has provided P3.5 billion in subsidy and P3.5 billion from the pension fund.

It can serve as a revolving fund that may be released to benefit more borrowers as these are recovered and collected, Solilapsi said.

“The loan amount shall be funded on a 50:50 basis from the National Government and SSS. The SSS portion carries an interest rate of six percent per annum based on diminishing principal balance until fully paid, while the government share has zero interest,” he said.