Getting teachers out of ‘debt trap’

  • Written by Mario Fetalino Jr.
  • Published in Opinion
  • Read: 360

PUBLIC school teachers are vulnerable to debts because their profession is not financially rewarding. I know this because my mother was a public school teacher and I saw how she got trapped in a web of debts in exchange for her family’s needs.

Hard working but poorly paid teachers like my mom are the favorite customers of money lenders because they always run short of cash for good reasons: they pay kids’ tuition, house rental, food on the table, daily ‘baon’ of their scholars, utility bills and more.

Most importantly, they are good payers of debts because for one, the employer of public school teachers is the government which is not supposed to run out of money. Besides, teachers are obliged to demonstrate the most admirable traits like the ability to fulfill obligations being the ones who mold students to become good citizens.

But the problem happens when lenders start to abuse the plight of needy teachers who eventually succumb to over exposure on loans. This is the point when they borrow more than what they earn. The result is that during payday, nothing is left on their pockets because everything went to the collector. And the vicious cycle goes on.
Good thing the government recently raised the salaries of teachers as programmed by President Rodrigo Duterte. The pay hike is more than well-deserved by public servants in the teaching profession.
Most importantly, Duterte recently witnessed the signing of an unprecedented memorandum of agreement between the Government Service Insurance System (GSIS) and the Department of Education (DepEd).
The pact will facilitate the payment of the loans of teachers and other  personnel of  DepEd from private lenders, through a loan facility from GSIS.

The GSIS doesn’t  want DepEd employees to sink deep into debt so it proposed a better way for them to manage their finances. The borrowers will pay back the loan to GSIS at easy and affordable terms.
GSIS president and general manager Jesus Clint Aranas said having several loans weaken the employees’ capability to settle their obligations, which include payment of their monthly GSIS premiums and contributions.
“Payment of their GSIS premiums and loans usually take a back seat.  If the practice continues, their future GSIS benefits are bound to suffer,” Aranas explained.
The project  reinforces the issuance of DepEd Order (DO) No. 38 on 31 July 2017 reiterating the instruction to prioritize premium and loan payments for GSIS  for other loans.
GFAL will be piloted for six months in 12 areas across the country, including Batangas, Bulacan, Dagupan, Naga, Cavite, Manila, Quezon City, Bohol, Ormoc, Koronadal, Butuan and Tagum.
Active GSIS regular members may apply for the loan if they are permanent; with paid premiums for the last three years; are not on leave of absence without pay; have an outstanding loan with DepEd-accredited PLIs; have no due and demandable GSIS loan; and have no pending administrative or criminal case.
If a private lender  has filed a case against members for nonpayment of obligations after GSIS loan payments have been prioritized by virtue of DO No. 38, such members are still eligible to apply for GFAL.
Qualified members may borrow up to P500,000, provided their take-home pay will not go lower than P5,000 their monthly obligations have been deducted.
The loan is  payable in monthly installments for six years at 6 percent interest rate per annum computed in advance. Payments will be automatically deducted from the borrower’s salary.
To apply, members may submit through their agency authorized officers (AAOs) a duly accomplished form, attached to which is an AAO-certified true copy of their pay slips for the last three months; certified documents specifying loan details with PLIs, such as borrower loan agreements and loan vouchers; and GSIS pro-forma statement of account duly accomplished by PLIs.

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