The end does not justify the means

Here is another case of killing the goose that lays the golden egg.

Last March, the Senate unanimously approved on third and final reading Senate Bill 1359 which would prohibit the “no permit, no exam” policy being implemented by many schools in the country that disallows students from taking exams due to unpaid tuition and other school fees.

The approved measure also prohibits schools from compelling students and their parents or legal guardians to pay a portion of the outstanding financial obligations. Instead, schools are encouraged to enforce other interventions such as withholding the release of diplomas or certificates, denying admission or enrolment in the succeeding year or semester, refusing the issuance of applicable clearances, and pursuing appropriate legal action to compel payment of any unpaid obligation.

SB 1359 covers all public and private educational institutions, including elementary secondary schools, higher education institutions, diploma or degree programs of higher educational institutions, and even short-term courses offered by technical-vocational training institutes.

It allows students and/or their parents or legal guardians to execute promissory notes indicating the amount of outstanding obligation and the date when such would be settled.

Even the act of educational institutions requiring any student to secure a permit to take an examination or any form of education assessment is prohibited.

The penalty is a fine of not less than P20,000 but more than P50,000 for each case.

Last May, the House of Representatives likewise approved a bill that would provide administrative sanctions against private elementary and high school educational institutions that will bar students from taking scheduled periodic examinations due to unsettled financial obligations.

The bill would allow students in private basic educational institutions to take examinations despite unpaid school fees if the same is due to emergencies, force majeure, and good cause or other justifiable reasons.

Any deferment of payment, however, should not go beyond the school year.

But school authorities are allowed to withhold the issuance of appropriate clearance and transfer credentials of elementary and secondary learners with unpaid financial obligations and to refuse their succeeding enrolment until all previous delinquencies are fully paid.

Also approved was Senate Bill 1864 which would provide a respite for college students from paying their financial obligations to their schools if the deadline falls during the declaration of either a national or local state of calamity in the area whether they are located.

These measures and their proponents are undoubtedly well-meaning. Students should not be made to suffer the consequences of their parents’ failure to pay their fees in school, especially if the failure is due to reasons beyond the control of the parents, like lack of funds or other emergencies.

Unfortunately, there are two sides to this equation.

Not all schools are like Ateneo or La Salle that can pay their teaching and other staff their salaries and wages from sources other than tuition. Many smaller private schools have a hand-to-mouth existence in the sense that these fees are the major, if not the only, source of funds to pay the staff. And if payment of tuition are delayed, then the school staff and their families will have to wait until the funds become available. Expenses for payment of salaries and wages of school staff occur monthly and raising these funds cannot be uncertain, which will happen if tuition and other fees are not paid on time.

Then of course there is the issue of impairment of contracts. When a student enrolls in any course, there is a contract entered into with the school to pay the fees on a particular date, otherwise interests or additional amounts will be imposed.

Many private schools are now operating at a loss. A study by the Catholic Educational Association of the Philippines (CEAP) last April showed that about 49 percent of the 224 basic education school surveyed are financially in the red or are only breaking. The rest reported that they only have a small surplus, at best.  

The same study showed that 64.2 percent of the 53 colleges and universities also reported that they are currently already at a loss or just at breakeven, meaning that their collections are just enough to meet their payables. 

There is also a recent study conducted by the Philippine Association of Colleges and Universities (PACU) where 27 private colleges and universities in the country revealed that tuition and other fee collections can only cover over seven months of operation expenses on average. 

In this study, it was also revealed that if the “no permit, no exam” policy is prohibited, the financial capacity of these schools would significantly weaken. Tuition and other fees would now be able to cover only two months’ worth of operating expenses on the average. 

While the proposed bills provide schools with alternatives like denying readmission, withholding grades or diplomas or clearance, or even going to court to demand payment, the fact does not change that if the fees are not paid on time, schools will not be able to meet their financial obligations, including those for utility bills.

If the state really wants to help the students, it should also help the schools, because without the schools, there would be nobody to teach these students. Maybe Congress can come up with a law that will also give the schools a means to be able to pay their own financial obligations while waiting for the students to fully pay their dues.

Disruptions in cash flow can easily push the small and medium private schools over the edge and may cause many to close their doors indefinitely.

It is not too late to rectify the potentially damaging effects of the proposed bills.

For starters, we have RA 6728 or the Government Assistance to Students and Teachers in Private Education Act which, among others, mandates the government to extend financial assistance for tuition for students in private high schools through a voucher system.

In 2015, the Department of Education introduced the voucher program as cash aid to senior high school students from private schools and non-DepEd-run public schools.

But the Private Education Assistance Committee has asked government to review the voucher system. While private schools in Metro Manila on the average charge tuition of about P35,000, the government only provides a subsidy of only P13,000. In some schools outside the National Capital Region, tuition and miscellaneous fees amount to P12,000 but the subsidy is only P9,000.

Whether we like it or not, private schools are busines ventures. If operating the school will entail undue hardship on the part of private school owners, no amount of dedication to helping improve education in the country will keep them from closing the school. Just take a look at what happened to Colegio de San Lorenzo which closed its doors a few days before school opening due to dire financial straits.

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