The Department of Education is seeking a loan moratorium with its partner private lending institutions (PLIs) and government funding institutions (GFIs) to provide a flexible and manageable loan payment scheme for DepEd employees.
“What is the best possible term for our employees? The Secretary [Leonor Magtolis Briones] has written to all of the GFIs and PLIs, strongly urging them to go beyond the 60-day grace period,” said Undersecretary for Finance Annalyn M. Sevilla.
Sevilla is referring to the provision of Republic Act (RA) 11494 granting a 60-day grace period for loans due on or before December 31, 2020. Sevilla said the DepEd has been negotiating with PLIs and GFIs to extend the moratorium to an additional 60 days and waive the accrued interest on these loans.
According to Sevilla, of the 173 lending institutions offering services to DepEd personnel, just about half agreed to extend the payment period to another two months. The lenders also agreed to completely waive the accrued interest for the 60-day grace period on payment of loans. The guidelines and list of these institutions were issued through DepEd Memorandum OUF-2020-0552.
Sevilla expressed gratitude to the 89 PLIs and GFIs that completely waived the accrued interest for the 60-day grace period on payment of loans.
Meanwhile, 30 of these lending institutions, comprised mostly of banks, have agreed to adhere to the 60-day grace period set by RA 11494. The lenders also agreed to extend another 60 days to the payment deadline at the end of the term of the loan.
These institutions, though, are still requiring the accrued interest to be paid on or before December 31, 2020, or as agreed between the lender and the borrower.
“We all know that the implementation of loan moratorium has an economic impact for both the borrowers and the lenders,” Sevilla said. She added they also understand why the 30 PLIs didn’t give a waiver “because they also have their own borrowings and investments to fund, they have employees to compensate and they also have other clientele aside from DepEd.”
Fifty lenders have not yet expressed their decision to waive accrued interest on the loan moratorium. Sevilla said that for these institutions, the basic guidelines of RA 11494 will be applied.
The DepEd’s automatic payroll deduction system (Apds) mechanically subtracts and remits the loan amortizations of the employees to the PLIs and GFIs. The DepEd said it will include the policies and adjustments provided by RA 11494 in the Apds.
As of August, the DepEd has recorded that 70.21 percent, or roughly 655,582 personnel, of the total 933,697 filled positions are borrowers from PLIs and/or GFIs.