By: Atty. Gregorio B. Austral, CPA
Understanding the Student Loan Payment Moratorium Act
The Student Loan Payment Moratorium During Disasters and Emergencies Act (Republic Act No. 12077), signed into law on December 6, 2024, is a significant step by the Philippine government to support students during tough times. This law recognizes that disasters and emergencies can put a financial strain on students and their families, potentially disrupting their education. To help, the Act provides a way to defer student loan payments during these challenging periods.
Who Benefits from the Act?
The Act covers students enrolled in various higher education institutions, including State Universities and Colleges (SUCs), Local Universities and Colleges (LUCs), private Higher Education Institutions (HEIs), and public and private Technical-Vocational Institutions (TVIs). The key requirement is that the student’s residence must be in an area officially declared under a State of Calamity or State of Emergency by the President of the Philippines or the relevant local government unit (LGU).
What Does the Act Do?
The main feature of the Act is the moratorium on all fees, charges, and costs related to student loans. This moratorium starts as soon as a State of Calamity or Emergency is declared and lasts for the entire duration of the declaration, plus an additional 30 days after it ends. This grace period gives students time to regain financial stability after the immediate crisis3. The moratorium applies to loans managed by educational institutions, the Unified Student Financial Assistance System for Tertiary Education (UniFAST) Board, the Commission on Higher Education (CHED), and other government agencies involved in student loan programs.
Protecting Students’ Progress
The Act includes safeguards to ensure that students’ academic progress and financial well-being are protected. It clearly states that using the moratorium will not affect students’ eligibility for re-enrollment in future semesters or terms, nor will it delay their graduation. Additionally, no penalties or interest will be added to the deferred payments, preventing students from facing extra financial burdens during an already difficult time.
Additional Support
The Act also allows public and private HEIs and TVIs to offer more extensive support to their students if they wish. This flexibility enables institutions to provide additional payment relief options or assistance programs based on their specific circumstances and the needs of their students. To prevent exploitation, students are prohibited from waiving the moratorium or any other government assistance or subsidies they are entitled to.