More Pre-need Firms to Close Due to Unabated Tuition Hikes : QC IMC

News Release
April 15, 2005

More Pre-need Firms to Close Due to Unabated Tuition Hikes
Upsurge in dropout rate seen in coming school year

Anak ng Bayan Youth Party predicted that more pre-need firms are doomed to close this coming school year unless the government starts to address the incessant tuition hikes in tertiary schools.

Carl Marc Ramota, Anak ng Bayan spokesperson said, “Unless the government starts to flex its muscles over the continuing tuition and miscellaneous fee hikes, we will be seeing more pre-need education firms closing in the next months. Evidently, even pre-need firms were not able to foresee and absorb the impact of unabated tuition increases in the last two decades.”

Recently, another pre-need firm declared bankcrupty a few months after industry giant College Assurance Plan (CAP) crumbled. Pacific Plans said it can no longer pay for the tuition of its planholders this coming school year.

“This was also the reason behind the unexpected collapse of CAP,” Ramota said. “Pacific Plans and CAP’s downfall merely highlight how the cost of education, particularly in the tertiary level, has dramatically increased after the deregulation of tuition.”

Deregulation of Tuition
From 1990 to 1995 just before the Asian financial bubble burst in 1997, tuition jumped to 275 percent. For the last 15 years since 1990, tuition has swelled by a whopping 670 percent.

Anak ng Bayan projects that if the average tuition rate increase of 12 percent continues for the next five years, the national average per unit would reach P590.20 by 2010. By then tuition would have increased by as high as 1,257.41 percent since 1990.

In the current schoolyear, 381 out of 1,321 private higher education institutions - or 29 percent of the total – have applied for tuition increase. The national average tuition increase is 11.37 percent or P33.15; the current rate per unit is P334.89.

In the National Capital Region, the average tuition is pegged at P614.54 posting a 10.83 percent increase compared to last year’s figures.

A study made by Anak ng Bayan Youth Party on the rising cost of tertiary education showed that in just five years, from academic year 2000-2001 to the present, the national average tuition rate has increased by as much as 63 percent. The National Capital Region (NCR) average rate, on the other hand, went up by 57 percent.

Based on the Commission on Higher Education’s (CHED) records on tuition increases, tuition was steadily increasing by an average of almost 12 percent for the last five years.

Ramota blamed the Education Act of 1982 for the continuous increase in the cost of tertiary education. “The deregulated environment set by the Act ensured the wholesale commodification of a fast-expanding private tertiary education,” he explained.

College Education Crisis in 2010
Ramota said the closure of pre-need firms sends a distressing signal to college hopefuls. “Parents and students apply for pre-need plans to ensure that they may be able to shoulder the high cost of tertiary education. With pre-need firms now closing, access to higher education has become impossible to many.”

“If pre-need firms can’t pay for their planholders’ tuition, what more for ordinary parents and students who do not even have one?”

Ramota also predicted an upsurge in the rate of college dropouts and number of out-of-school youth in the coming school year, a situation that will worsen in 2010.

“Five years from now, the Philippines’ tertiary education will likely face a crisis if the current trends in college enrolment and dropouts will continue,” he warned.