By Merlina Hernando-Malipot
The Department of Education (DepEd) has formalized its partnership with the Government Service Insurance System (GSIS) to facilitate the payment of the loans from private lenders through a loan facility.
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Education Secretary Leonor Briones, in a statement, said that the latest initiative is in line with DepEd’s constant efforts to promote the welfare and improving the financial capability of its teaching and non-teaching personnel.
“This partnership is one way for DepEd to help hundreds of thousands of its teachers and personnel free themselves from the burden of loans and over-borrowing, while ensuring the preservation of their GSIS benefits and fulfilling DepEd’s legal mandate under the General Appropriations Act (GAA),” Briones said.
The signing of the MOA was witnessed by President Duterte in Malacanang on Monday. Briones and GSIS President and General Manager Jesus Clint Aranas signed the MOA on the GSIS Financial Assistance Loan to DepEd Personnel (GFAL) on behalf of their respective agencies.
The GFAL is a “financial assistance loan program extended by GSIS to eligible DepEd borrowers on a voluntary basis to help protect them from the risk of losing their hard-earned retirement or separation benefits.”
Eligible DepEd borrowers’ existing loans with PLIs will be refinanced by the GSIS at a lower nominal interest rate of six percent per annum and a longer loan term of up to six years under the GFAL. Meanwhile, eligible DepEd borrowers who opt to avail of the GFAL will now be able to have reduced monthly loan amortizations.
The DepEd and GSIS have agreed to “prioritize borrowers whose monthly payment for obligations exceed the P5,000 monthly Net Take Home Pay (NTHP) to allow them to service their current obligation.”
In a separate statement, GSIS dubbed the signing of the MOAS as “unprecedented.”
“We don’t want DepEd employees to sink deep into debt, so we have proposed a better way for them to manage their finances,” said Aranas. “The borrowers will pay back the loan to GSIS at easy and affordable terms,” he added.