Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Declaration of policy.— It is hereby declared a national policy to give equal opportunity to all persons who desire to pursue higher education by extending financial assistance and promoting scholarship grants-in-aid to deserving students to the end that no person shall be deprived of the benefits of education on account of poverty.

SEC. 2. Students' Loan Fund Authority,— To carry out such declared policy, there is hereby created a Students' Loan Fund Authority under the Department of Education, hereinafter referred to as the Authority, which shall be organized within sixty days after the approval of this Act. The Authority shall have its principal place of business in the City of Manila.

SEC. 3. Definition of terms.— For purposes of this Act, the following terms shall mean:

(1) The Authority shall refer to the Students' Loan Fund Authority.
(2) Scholarship grants-in-aid refer to such amounts loaned to student recipients to cover matriculation and other school fees;
(3) Education loans refer to such amounts loaned to student recipients to cover expenses for books, subsistence, board and lodging.

SEC. 4. Powers, functions and duties of the Authority.— The Authority shall have the following powers, functions and duties:

(a) To establish and adopt a program of generating funds for educational loans and scholarship grants-in-aid to students who qualify under the provisions of this Act;
(b) To encourage and coordinate the grant of scholarship grants-in-aid to deserving students by public and private agencies;
(c) To plan and implement a program of financing the education of needy and deserving students: Provided, however, That the distribution of loans and scholarship grants-in-aid to the various cities and provinces shall be in proportion to their population: Provided, further, That support for student recipients shall be given until they finish their course of study: Provided, finally, That student-debtors shall not be entitled to financial aid for subjects they repeat on account of failure or unjustified drop-out;
(d) To establish a priority of courses based on the manpower needs of the country and accordingly approve applications for assistance on the basis of such priorities;
(e) To prepare and administer all the necessary psychological aptitude, intelligence quotient and all other pedagogical tests necessary for the proper screening of the student recipients under this Act;
(f) To develop a system of collecting payments of loans granted to students under this Act: Provided, however, That the annual amortization of such loans shall not exceed fifteen per cent of the annual income of the grantee;
(g) To publicize and make available all information regarding the functions and work of the Authority;
(h) To conduct studies and researches on the extent poverty deprives students of pursuing college education or other forms of higher education after graduation from secondary schools and to recommend appropriate solutions for legislative action;
(i) To establish a center of information which will publicize scholarship opportunities available to Filipino students in colleges and universities here and abroad;
(j) To solicit and receive donations, legacies, grants-in-aid and other forms of contribution, whether in cash or in property from both public and private sources, here and abroad, which shall accrue to the special fund created in this Act, and to receive and utilize the services and assistance of experts: Provided, That such donations, legacies, grants-in-aid and contributions shall be exempt from taxation and shall be allowable deductions for income tax purposes;
(k) To avail of the personnel and office facilities of the Department of Education, universities, colleges and schools in coordination with the proper officers for the efficient implementation of the provisions of this Act;
(l) To issue rules and regulations necessary for the proper implementation of this Act; and
(m) To exercise such other powers and perform such other functions and duties as will promote and expand scholarship grants-in-aid and educational opportunities for needy and deserving students to carry into effect the provisions of this Act.

SEC. 5. Executive Board.— The powers of the Authority shall be exercised and its functions and duties performed by an Executive Board which shall be composed of twelve members, with the Secretary of Education as Chairman, or in his absence, the Undersecretary of Education for policy, who shall all be appointed by the President of the Philippines with the consent of the Commission on Appointments. The other members are as follows:

(a) A representative from state universities and colleges who shall be the Vice-Chairman;
(b) A representative of sectarian universities and colleges, who shall be selected from the list of four nominees by the Catholic Educational Association of the Philippines and Association of Christian Schools and Colleges;
(c) A representative of non-sectarian private universities and colleges, who shall be selected from the list of four nominees by the Philippine Association of Colleges and Universities;
(d) A representative from the Philippine Association for Guidance and Personnel;
(e) A representative from the Commission on National Integration;
(f) A representative from the Department of Labor;
(g) Two representatives from government financing institutions;
(h) Two representatives from the private sector, one representing insurance and banking, and the other representing other business; and (i) One representative from the student sector: Provided, however, That the appointee shall not be more than 30 years of age; Provided, finally, That the student representative shall hold office for a term of only one year.

SEC. 6. Term of Office.— The members of the Board shall hold office for a term of four years from the date of their respective appointments and may not be removed except for cause: Provided, however, That in the case of the representatives from the sectarian or non-sectarian universities and colleges, a request by the organization involved to change its representative shall be deemed sufficient cause for removal. In case of vacancy in the Board due to death, resignation, removal or incapacity of a member thereof, the President may appoint a successor who shall serve for the unexpired portion of the term of the member he replaced.

SEC. 7. Meetings of the Board.— The Board shall meet at least once a month or as often as may be necessary to carry into effect the purposes of this Act. The Board shall be convened by the Chairman or upon the written request of at least three members thereof.

SEC. 8. Compensation of members.— The Chairman and Members of the Board shall each receive a per diem of fifty pesos for each day of meeting personally and actually attended by them, but which in no case shall aggregate more than two hundred pesos a month.

SEC. 9. Commissioners of the Authority.— There shall be in the Authority a Commissioner who shall be assisted in the exercise of his powers and the performance of his functions and duties, by one Deputy Commissioner. The Commissioner and the Deputy Commissioner shall be appointed by the Executive Board with the approval of the President of the Philippines. The Commissioners shall have at least seven years experience in school or educational administration and a holder of at least a Master's Degree or its equivalent conferred by a reputable educational institution.

The Commissioner shall receive an annual salary equal to the salary of an undersecretary of an executive department, and the Deputy Commissioner an annual salary equal to that of bureau director.

The Commissioner and Deputy Commissioner shall serve for a term of nine years from the date of their respective appointments and they shall not be removed except for cause. In case of vacancy in the position of the Commissioner or Deputy Commissioner, the Board may appoint a successor who shall serve for the unexpired portion of the term of his predecessor.

SEC. 10. Powers and duties of the Commissioner.— The Commissioner shall be the Secretary of the Board and the executive officer of the Authority. He shall have the following powers and duties;

(a) To execute and implement the policies, rules and regulations established, adopted and promulgated by the Board;
(b) To organize the administrative machinery of the Authority and, with the approval of the Board, fix the number and salary and appoint the personnel of the Authority; and
(c) To perform such other functions and duties as the Board may direct to accomplish the purposes of this Act.

SEC 11. Students' Loan Fund.— There is hereby created a special fund to be known as the Students' Loan Fund which shall be administered by the Executive Board of the Authority. The Students' Loan Fund shall be used to finance education loans and scholarship grants-in-aid for students who are qualified under this Act. The Students' Loan Fund shall be constituted out of the proceeds of bonds which the Authority may issue, subject to the approval of the President of the Philippines, and of donations, legacies, grants-in-aid and other forms of contributions received by the Authority for the purposes and such amounts as may be appropriated by law for the same purpose.

SEC. 12. Bond issues.— The Authority is hereby authorized to issue bonds in an amount not exceeding fifty million pesos which shall accrue to the Students' Loan Fund and bear interest at six per cent per annum. The Authority shall, in consultation with the Monetary Board, prescribe the form, denomination, maturity which shall not extend beyond a period of fifteen years, negotiability, convertibility, call and redemption features and such other terms and conditions of issuance, servicing, redemption and payment of such bonds. The bonds issued under this Act shall be guaranteed by the Republic of the Philippines and shall be exempt from taxation, attachment or seizure and shall be acceptable as collateral for loans in all government financing corporations up to sixty per cent of its face value.

A sinking fund shall be established for the payment of the bonds issued under this Act in such manner that the total contributions thereto, accrued at such rate of interest as may be determined, shall be sufficient to redeem at maturity the bonds issued.

SEC. 13. Qualifications of Applicants.— Any Filipino citizen who graduates from a duly recognized high school, who, though a minor, shall be vested with capacity to act for purposes of contracting a loan under this Act, may apply for education loans and scholarship grants-in-aid from the Authority under the following conditions;

(a) He must have obtained a general average of at least eighty per cent throughout the entire high school course;
(b) He must present a certificate signed by the principal of the high school from which he was graduated that he is qualified to pursue college education or any other form of higher education: Provided, however, That the principal's refusal to issue a certification may be referred to the appropriate office of the Department of Education for final decision;
(c) He must present an affidavit executed by one of his parents, or in default thereof, by his legal guardian, that his parents or guardian has an annual income of less than two thousand five hundred pesos and does not own real estate in excess of P5,000.00 in assessed value, which affidavit shall be subscribed and sworn to before the city or municipal treasurer of the applicant's residence;
(d) He must submit a written projection and plan for his studies which will include the length of time necessary to finish his course, the total expenses that will be incurred, his reasons for wanting to take said course, and a brief statement as to what he plans to do after college.
(e) He must pass the various examinations prepared and administered by the Authority,

SEC. 14. Payment of Loan.&mdashAny loan granted under this Act shall be paid by the student-debtor after he has finished the course or profession for which the proceeds of the loan was expended, and after a period of one year from the time he has acquired an employment: Provided, however, That interest at the rate of 6% per annum shall accrue on the total amount or the balance thereof, borrowed by the student-debtor upon employment.

SEC. 15. Payment of school and other fees.— Scholarship grants-in-aid to students shall be paid directly to the educational institution where such students are enrolled. Payments may be in the form of cash or bonds issued by the Authority under this Act. Education loans shall be made payable to the book store or boarding house concerned. Payment may be made in the form of cash or bonds issued by the Authority; Provided, however, That portion of the education loan for the subsistence allowance shall be payable in cash directly to the student-recipient.

SEC. 16. Appropriation.— There is hereby appropriated the sum of two hundred thousand pesos out of any funds in the national treasury not otherwise appropriated, which shall form part of the Students' Loan Fund to be used to finance loans to students who are qualified under this Act.

There is hereby further appropriated the sum of one hundred thousand pesos out of any funds in the national treasury not otherwise appropriated, for the operating expenses of the Students' Loan Authority during the fiscal year ending June nineteen hundred seventy. Thereafter, the necessary sums to provide funds for its operating expenses and for at least ten thousand educational loans shall be included in the annual general appropriations Acts.

SEC. 17. Repealing Clause.— All Acts, parts of Acts and executive orders inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 18. Effectivity.— This Act shall take effect upon its approval.

Approved, August 4, 1969.