Beware of ‘promising’ educational plans

By Herbert Vego

THERE was a time when this corner exposed the lament of Central Philippine University (CPU) over the millions of pesos it had not collected from the pre-need College Assurance Plan (CAP) on behalf of beneficiaries who had availed themselves of its pre-need education plan.

The late CPU President Juanito Acanto confirmed the bad news to this writer but would rather not discuss it.

He could only keep his fingers crossed that CAP would earn enough from rentals of its buildings so that it could pay all its indebtedness to creditor schools nationwide.

But the schools don’t agonize as much as the poor parents who had paid CAP their bottom peso, but whose children had never availed of the plan because colleges and universities would no longer accept CAP-covered students unless they had money to pay the schools directly.

In its heyday, CAP attracted the attention of parents with the promise that their pre-school kids could go to college years later and “pay tomorrow’s rates at today’s prices.”

Under that policy, the parent pays in advance the college tuition of his boy or girl to the pre-need insurer at the present rate.

When tuition fees rise, however, CAP  would shoulder the child’s tuition at higher cost.

Most of those kids are now professional adults. They have not forgotten how their parents in the 1990s paid CAP for scholarship vouchers worth PHP 40,000 each or more, but which have been dishonored.

A sister of mine and her late husband were among those who bought pre-need education for a son and a daughter in that decade. Unfortunately, by the time they had fully paid CAP for the children’s college education, it had gone bankrupt, unable to pay overdue school debts.

Naturally, the widowed mother had to work harder to send her daughter to the University of Santo Tomas and her son to Ateneo de Manila.

Many other parents have been similarly victimized by other insurance companies.

One of them is my friend Melvin S. De Leon, 81, a retired businessman here in Iloilo City.

Over coffee with this writer, Melvin lamented the loss of PHP 244,275 that he and his daughter Caren had paid on five-year installment to Eternal Pension Plan – a subsidiary of the renowned Eternal Plans, Inc owned by the Cabangon-Chua Group of Companies – for the educational plan of his youngest daughter Mayvin, and for which he was issued a certificate of full payment on June 7, 2016 with a maturity date of June 1, 2022.

Eternal, however, paid only PHP for the first semester of her college education, and nothing more in the second and succeeding semesters.

As if to justify its laxity, Eternal Plans told ABS-CBN News on Mar 07, 2022 that the pre-need industry was “plagued” by payouts exceeding the anticipated rates due to “frequent tuition fee increases” and decades of weak investment portfolio.

In view of the failure of the insurer to fulfill its commitment, De Leon asked for a refund of his money but to no avail.

On July 5, 2023, he wrote a letter to President Ferdinand Marcos Jr., asking for help.

“Without your intervention,” he wrote, “we cannot claim the amount from the company.”

On later dates, he wrote the same plea for help from Risa Senators Risa Hontiveros, Panfilo Lacson and Raffy Tulgo, all of which have remained unanswered.

Now, the sad reality is that while Eternal Plans, Inc. still exists, it has been under conservatorship by the Insurance Commission (IC) since early 2022.

Alas, did I hear right that the company continues to offer its services?

Napakasakit, Kuya Eddie.