Approximately 1,000 public school teachers and staff struggling with garnished salaries are expected to regain financial stability under a new loan refinancing agreement between the Department of Education (DepEd) and the Land Bank of the Philippines (LandBank).

The partnership, formalized Thursday, allows LandBank to refinance the existing debt of DepEd personnel currently tied to private lending institutions. The initiative targets workers who have seen their net take-home pay vanish due to mounting deductions from high-interest private loans.

Education Secretary Sonny Angara said the program is part of a broader commitment to protect teacher welfare, noting that financial distress often undermines educator morale.

“Teachers who serve every day to uplift the future of our youth should not be drowning in debt,” Angara said. “If we can help them recover and breathe again financially, it is our duty to do so.”

Under the agreement, DepEd waived its 0.5 percent service fee on remittances. This allowed LandBank to reduce the interest rate for the refinancing program to 6.5 percent per year, down from 7 percent.

This rate is significantly lower than those of some unaccredited lenders, where interest can reach 3 percent per month.

The partnership covers approximately P500 million in salary loan accounts. Officials expect the refinancing scheme will enable affected personnel to once again receive the mandated minimum net take-home pay of P5,000.

“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,” LandBank president and CEO Ma. Lynette Ortiz said.

DepEd cited that many educators fall into debt cycles due to urgent family emergencies or out-of-pocket classroom expenses. By providing “breathing room,” the agency aims to improve overall well-being and allow teachers to focus on instruction.

“When our teachers are more at peace, they can focus better on their most important duty — teaching and guiding our students,” Angara said.

The agency and LandBank will begin nationwide orientation and implementation activities for the program in the coming months.