DepEd, LANDBANK roll out loan refinancing to ease teachers' debt burden

Around 1,000 public school teachers and non-teaching personnel with heavily garnished salaries may soon see relief after the Department of Education (DepEd) partnered with the Land Bank of the Philippines (LANDBANK) to refinance high-interest private loans, aiming to restore a more livable take-home pay.

The agreement, formalized on May 14, introduces a loan assistance program that allows LANDBANK to take over existing debts of affected personnel currently tied to private lenders—some of which charge interest rates as high as 3 percent per month. Under the new scheme, loans will be refinanced at a lower annual rate of 6.5 percent, down from the initial 7 percent, following DepEd’s decision to waive a 0.5 percent service fee on remittances.

Education Secretary Sonny Angara said the initiative seeks to address the long-standing issue of teachers falling into cycles of debt, which in many cases has resulted in minimal or even zero net pay after deductions.

“Hindi dapat nalulunod sa utang ang mga gurong araw-araw na nagsisilbi para maiangat ang kinabukasan ng ating mga kabataan. Kung matutulungan natin silang makabangon at makahinga muli financially, tungkulin nating gawin iyon,” Angara said.

The program is expected to cover approximately 1,000 loan accounts amounting to around P500 million. With the restructuring, affected employees may regain at least the mandated P5,000 minimum net take-home pay, a threshold often unmet due to multiple loan deductions and salary garnishments.

LANDBANK President and CEO Lynette Ortiz described the initiative as part of a broader effort to expand financial support for educators who have historically relied on informal or high-cost lending.

“These are not add-ons; they’re part of building a more complete financial relationship with teachers who have historically been underserved by the formal banking system,” Ortiz said.

Salary deductions linked to loan repayments have long strained the finances of many public school personnel, limiting their ability to cover daily expenses or build savings.

DepEd said the refinancing program is designed to provide immediate financial breathing room while promoting more sustainable borrowing conditions.

The department and LANDBANK are set to conduct further coordination and orientation activities in the coming months to guide eligible beneficiaries through the program rollout. —Sherylin Untalan/RF, GMA News