DepEd Extends Salary Loan Repayment Period to Seven Years to Ease Financial Burden on Educators

The Department of Education (DepEd) has approved an extension of the maximum repayment period for salary loans of its personnel from five years to seven years. This policy change, formalized in DepEd Order No. 020, series of 2026, aims to alleviate the financial strain on teachers and school employees by reducing their monthly loan payments.

This adjustment aligns DepEd’s guidelines with the Bangko Sentral ng Pilipinas (BSP) Circular No. 1239, which similarly extended the allowable repayment period for salary-based loans. The move follows Education Secretary Sonny Angara’s request to the BSP earlier this year to allow more flexible loan structures in response to appeals from educators seeking financial relief.

Previously, the maximum loan term had been extended from three years to five years. The latest reform further lengthens this period to seven years, providing borrowers with more manageable monthly amortizations. Angara emphasized that this initiative is part of ongoing efforts to find concrete ways to ease the daily lives of teachers and personnel.

He noted that the extension is consistent with President Bongbong Marcos’ directive to safeguard the welfare of educators. By increasing the loan term from three to five and now seven years, the policy is expected to lower monthly deductions from salaries and increase take-home pay for families of DepEd employees.

Under the new guidelines, qualified borrowers may repay their loans over a period of up to seven years. Existing loans may also be restructured to take advantage of the longer repayment period, subject to approval. However, DepEd clarified that the extension is not automatic; it remains contingent on credit evaluation and approval by banks and private lending institutions accredited under the Automatic Payroll Deduction System (APDS).

The department stressed that the policy aims to provide more flexible repayment options while promoting responsible borrowing. It is not intended to encourage employees to incur additional debt. To support this, banks and lending institutions accredited under APDS are now required to conduct mandatory financial literacy and loan education sessions before processing or releasing loans to DepEd personnel.

DepEd also urged teachers and staff to borrow only from government financial institutions, government banks such as LandBank, and APDS-accredited banks and private lenders. The department warned against borrowing from loan sharks and unauthorized lenders, which often impose exorbitant interest rates and unfavorable terms.

This extension of the salary loan repayment period is expected to provide significant financial relief to educators, many of whom have struggled with multiple loan deductions that reduce their net pay. By allowing longer repayment terms, DepEd hopes to improve the financial stability and well-being of its personnel, enabling them to better support their families while continuing their service to the education sector.