The Coordinating Council of Private Educational Associations (COCOPEA)—a group of private schools, colleges, universities, and technical and vocational education and training institutions—warned that many private colleges and universities will run out of operating cash in less than two months if the “No Permit, No Exam” policy is prohibited.
COCOPEA chairperson Bernard Villamor explained that a recent study conducted by the Philippine Association of Colleges and Universities (PACU) and participated in by 27 private colleges and universities showed that as of now, tuition and other fees collections can only cover 7.7-months of operation expenses on average.
However, if the “No Permit, No Exam” policy is prohibited, the study showed that the financial capacity of these schools would significantly weaken, and tuition and other fees would now be able to cover only two months’ worth of operating expenses on average.
“After which, colleges and universities would run out of operating cash and would need to find external or other sources of financing (such as loans or savings) to cover their costs. This is a significant drop from the 7.7-month average colleges and universities have under the status quo,” Villamor said. “In the absence or lack of effective means to collect, or any compulsion to ensure prompt payment, we fear that the viability of private educational institutions will be endangered, which in turn will disrupt access to education. It is clear that for private schools, colleges and universities, any payment received go towards paying all capital expenditures or costs associated with school operations. Thus, making prompt payment or collection critical. In turn, moral compulsion is necessary to ensure that there is prompt payment,” he added.
Villamor also cited an April 2023 study by the Catholic Educational Association of the Philippines (CEAP), where about 49% of the 224 basic education school respondents reported that they are currently already at a loss financially or are only breaking even in terms of monthly expenses compared to monthly collections. The rest reported that they only have a small surplus, at best.
Similarly, the study showed that 64.2% of the 53 college and university respondents also reported that they are currently already at a loss or at a breakeven point.
“These schools will be most financially at risk with the ‘No Permit, No Exam’ bill. Breaking even in the school set-up means that any income generated from tuition is just enough to cover the operating costs and expenses, such as salaries of teachers and school employees, energy, water and other utilities, and other operating expenses. CEAP and non-CEAP schools, colleges and universities covering an enrollment of 532,000 students participated in the study,” Villamor explained.
“In as much as taxes are the lifeblood of the government, tuition and other school fees are the lifeblood of private educational institutions. As such, its prompt payment and certain availability is an imperious need for private educational institutions who heavily rely on a steady operating cash flow for its continued day-to-day operations,” he added.
Without operating cash, Villamor said many private colleges and universities will be forced to close down.
“Impairing the private schools’ means of effectively collecting fees may, in the long run, have adverse effects to its viability, such that it will not be able to effectively sustain its operations and services and eventually result in its closure. Closure is even more the likely reality for most small schools, mission schools, parochial schools and other similar schools who rely heavily on the prompt payment of fees. Displaced students will likely transfer to public schools, which are already overwhelmed by the number of students who transferred due to the pandemic,” he added.
While there are proposed safeguards on the bill to ensure that parents will still pay the tuition and other fees, Villamor argued that these safeguards or interventions such as the non-readmission in the next school year or semester, withholding of grades, certificates, diplomas or other credentials and clearances, and resort to court action, may not be adequate.
“These do not directly address the issue of operational costs and are actually being done together already at present with any NPNE (No permit, no exam) requirements. These are reactionary measures that can be resorted to only after operational expenses have been incurred. Respectfully, there must be proactive or preventive measures that will ensure that the operational costs of private schools do not accumulate to the point that they are unable to sustain operations,” Villamor said.
“These measures are already being done by schools, colleges and universities, and are thus incorporated into the survey results cited in the survey,” Villamor added.
Earlier, COCOPEA issued a statement strongly opposing the passage of Senate Bill 1359 and House Bill 7584, which prohibits educational institutions from imposing a policy that will prevent students with unsettled financial obligations from taking examinations.
COCOPEA is the unifying voice of the private education sector in the Philippines with more than 2,500 member institutions. It is made up of five educational associations: Association of Christian Schools, Colleges, and Universities (ACSCU); Catholic Educational Association of the Philippines (CEAP); Philippine Association of Colleges and Universities (PACU); Philippine Association of Private Schools, Colleges, and Universities (PAPSCU); and the Unified TVET of the Philippines (UniTVET).
