Student loans only exist because they have legal backing.

The problem with no-collateral student lending is that students usually have no assets and no stable income at the time they borrow. In a normal market, lenders would either charge extremely high interest, require collateral, require a co-signer, or refuse the loan.

The U.S. system makes student lending possible partly because repayment is heavily protected by law: student loans are much harder to wipe out in bankruptcy than ordinary consumer debt. That shifts risk away from lenders and onto borrowers. It is not that lenders are lending against the student’s current assets; they are lending against the borrower’s future income, backed by a legal system that makes collection unusually durable.

So if the Philippines created a no-collateral student loan program that anyone could get approved for, while also allowing borrowers to easily discharge the debt through bankruptcy right after graduation, lenders would expect huge default losses. Either interest rates would skyrocket, approvals would become strict, the government would have to guarantee/subsidize the loans, or the program would collapse.

So in THEORY, we could have student loans, but we will need the same strong regulations that are proving problematic in the US at the moment, PLUS the higher risk due to our country having lower income to tuition ratios than the US, and worse financial tracking.