A survey by Philamlife states that only 23% of Filipinos finish college due to financial constraints. In a country like the Philippines, getting a degree can greatly influence a person’s career and opportunities. While the government is proactive in providing free education for the people, some are still left without a degree.
With close to 3 million students enrolled for higher education last year, the competition to get into state universities and local colleges to take advantage of free tuition is steep. This year alone, only 13% or 11,821 out of 90,426 senior high school students passed the entrance exams for the University of the Philippines system — the premier state university of the country.
So what can you do if you want to get a degree?
With more student loan programs sprouting to support the underprivileged and hopeful youth, such as CHED’s new short-term loan program for students, there are now more ways for aspiring graduates to get funding for their higher education. If you’re looking for other sources for funding, here are your other options:
Government Student Loans
Student loans in different forms from various government branches have been around for a long time. Aside from locally-sponsored scholarships, your parents may take out loans from institutions such as CHED, GSIS, and SSS.
GSIS and SSS both offer Educational Assistance Loans for their members and voluntary contributors, with a max financial aid of P20,000. While the options for government loans may seem limited, more programs are being developed to support the growing number of students in the Philippines.
The application process for loans provided by these institutions are known to be very competitive and long, so if you need funding for your education as soon as possible, it might not be the best choice considering the time it takes the loan to be approved. Additionally, the limit for education loans is only between P15,000 and P20,000 with 6% interest per annum, with immediate repayment terms.
Bank & Private Firm Loans
Considering the very low lending limit set by government education loans, you may turn to bank and private lending firms for your student loans needs.
These institutions tend to have a higher limit on annual financial aid. Banks can loan up to P300,000 while private lending firms can lend up to P30,000.
Banks and financial lenders often require collateral — which students just don’t have. And even if you have collateral, you have to start paying the loan while you’re still studying.
Informal loans refer to loans taken out in an informal way, most often bound by no contract and thus, unregulated. Loans from relatives, friends and loan sharks fall under this category.
Taking out an education loan from relatives or friends can be easy, considering that it doesn’t require any paperwork and is based solely on trust.
Being unregulated has its disadvantages since there’s no clear agreement that defines the payment terms, interest rate, and the maximum amount to be borrowed, it may lead to misunderstandings — and may make the transaction difficult to manage.
Borrowing from loan sharks, similarly, has dangerous disadvantages such as its outrageous interest rates of 120% to 360% and irregular payment schemes.
InvestED: Revolutionizing Student Loans in the Philippines
InvestED prides itself as the leading provider of educational loans in the Philippines. The company offers a brand new alternative to compete with other education loan sources, putting a premium to serving the needs of the underserved and unbanked population in the Philippines.
Unlike government loans, applying for a student loan with InvestED is easier. To apply for an InvestEd student loan, you must be:
- A Filipino citizen or resident of the Philippines
- At least 18 years old
- In their last two years of college
- Enrolled in a university in the Philippines
Aside from easier requirements, InvestEd’s application process only takes 3–7 business days. The company provides a study now, pay later payment scheme that enables you to pay for your loan after finding a job and a Borrower Success Program assisted by coaches and alumni Investees to guide you in your repayment as well as in your educational and professional success.
For the maximum loan amount, you can be granted as much as P100,000, depending on your credit score results.
There are limitations as to the scope of the loan, as the covered expenses are still subject to InvestEd’s approval. This may include tuition, your daily stipend, miscellaneous school fees, laptops and gadgets, project expenses, and more.
It’s no question that there are clear problems causing the country’s low college graduation rate. While scholarships are available, the competition is steep, forcing families to take out loans to support their child’s education. Student loans, on the other hand, is a more accessible option to continue your studies. Plus, deciding to take control of your future and applying for a student loan might not only help ease your short-term financial burden; in the long run, this may also help develop your sense of responsibility and drive to pursue your goals. It all begins with a single step you take today.
If you want to learn more about how you can apply for a student from InvestEd, click here.