Introduction

The practice commonly known as “No Permit, No Exam” or the withholding of report cards, grades, transcripts of records, diplomas, and other credentials due to unpaid tuition and other school fees has long been one of the most controversial issues in Philippine education. While schools justify it as a legitimate means to enforce payment of contractual obligations, students, parents, and education advocates decry it as a violation of the constitutional right to education and an instrument of discrimination against the poor.

The legality of the practice varies significantly depending on the education level (basic education vs. higher education), the type of institution (public vs. private), and whether the withholding pertains to (1) preventing the taking of examinations or (2) refusing to release credentials after the examinations have been taken.

Constitutional and Statutory Framework

The 1987 Constitution, Article XIV, Section 1 guarantees that the State shall protect and promote the right of all citizens to quality education at all levels and shall take appropriate steps to make such education accessible to all.

Batas Pambansa Blg. 232 (Education Act of 1982), Section 9(2) expressly grants students the right to “receive competent instruction and relevant quality education,” while Section 9(8) grants the right to “prompt issuance of grades, report cards, certificates and diplomas.”

Republic Act No. 10533 (Enhanced Basic Education Act of 2013) reinforces the State policy that basic education is a right and must be made accessible without discrimination.

These provisions form the constitutional and statutory backbone of all arguments against withholding policies that effectively deny students access to examination or completion of their studies due to financial incapacity.

Basic Education (K to 12) – DepEd Jurisdiction

Public Schools

Public elementary and secondary schools are prohibited from implementing any “No Permit, No Exam” policy or withholding report cards/grades due to non-payment of any fee. Tuition and all school fees (except authorized voluntary contributions) are illegal in public schools. Any attempt to deny a student the right to take examinations or receive grades is a direct violation of DepEd regulations and may constitute grave misconduct or child abuse under RA 7610.

Private Schools

Private schools under DepEd supervision are likewise strictly prohibited from preventing students from taking periodic or final examinations due to unpaid tuition or other fees.

Key DepEd issuances:

DepEd Order No. 41, s. 2012 – explicitly prohibits the “No Permit, No Exam” policy in private schools.
DepEd Order No. 32, s. 2012 – reiterates the prohibition and emphasizes that no student shall be denied the right to take examinations due to financial obligations.
DepEd Memorandum No. 114, s. 2016; No. 159, s. 2016; No. 170, s. 2018; No. 47, s. 2023 – successive reminders that the policy remains prohibited.
DepEd Order No. 88, s. 2010 (Revised Manual of Regulations for Private Schools in Basic Education), while allowing schools to collect tuition, does not authorize denial of examination as a collection mechanism.

DepEd policy allows private schools to withhold the release of the Report Card (Form 138) until financial obligations are settled, but they must issue a certification of grades or a provisional report card if the student needs to transfer or enroll elsewhere.

For graduating Senior High School students, DepEd strictly requires the immediate release of the Diploma, Form 137 (Permanent Record), and all other credentials even if there are unpaid accounts. The school may only pursue collection through civil means separately. Failure to release these documents is punishable by administrative sanctions, including possible revocation of school permit.

Violation of these policies by private schools may result in administrative complaints before DepEd regional offices, cancellation of government recognition/permit, or criminal complaints for violation of RA 7610 (Special Protection of Children Against Abuse).

Higher Education – CHED Jurisdiction

State Universities and Colleges (SUCs) and Local Universities and Colleges (LUCs)

SUCs and LUCs are generally prohibited from withholding grades, TOR, or diplomas due to unpaid tuition, especially after the passage of RA 10931 (Universal Access to Quality Tertiary Education Act of 2017), which provides free tuition in SUCs and LUCs. Any outstanding balances from miscellaneous fees may be collected separately, but may not be used to block graduation or issuance of credentials.

Private Higher Education Institutions (HEIs)

Private colleges and universities are generally allowed to withhold transcripts of records, diplomas, and other credentials for unpaid tuition and fees. This has been consistently upheld by the Supreme Court as a valid exercise of contractual rights and the school’s property right over the documents it issues.

Key Supreme Court decisions:

University of the East v. Hon. Romeo A. Domingo (G.R. No. 133926, September 27, 1999) – upheld the school’s right to withhold TOR for unpaid accounts.
Chiang Kai Shek College v. Court of Appeals (G.R. No. 152988, August 24, 2004) – ruled that issuance of grades and credentials is part of the service for which tuition is paid; non-payment justifies withholding.
Regino v. Pangasinan Colleges of Science and Technology (G.R. No. 156109, November 18, 2004) – explicitly allowed withholding of TOR as a “peaceful means of pressuring students to pay their debts.”
Jose R. Reyes Memorial Medical Center v. Court of Appeals (G.R. No. 105368, December 10, 1993) – earlier precedent affirming the same principle.

CHED has never issued a blanket prohibition similar to DepEd’s. CHED Memorandum Order No. 09, s. 2013 (Enhanced Policies on Student Affairs and Services) and subsequent issuances merely encourage flexible payment schemes and leniency during calamities, but do not prohibit withholding of credentials.

Many private HEIs include explicit provisions in their student handbooks stating that “the school reserves the right to withhold grades, TOR, diploma, and other credentials until full settlement of all financial obligations.” Such provisions are considered valid and binding contracts under the Civil Code.

However, the withholding must not be permanent or abusive. Once payment is made or a reasonable arrangement is reached, the school must release the documents promptly. Refusal to do so after settlement may constitute violation of RA 9485 (Anti-Red Tape Act) or unjust enrichment.

TESDA Institutions

Technical-vocational institutions under TESDA follow rules similar to CHED-regulated private HEIs. Withholding of National Certificates (NC), Certificates of Competency, and transcripts for unpaid training fees is generally allowed in private TVIs, subject to the same contractual principles upheld by jurisprudence.

Exceptions and Special Circumstances

Calamities and emergencies – During typhoons, pandemics (e.g., COVID-19), DepEd, CHED, and TESDA jointly issue moratoriums on collection and prohibit withholding of grades/credentials (see Joint Memorandum Circular No. 2020-01, 2021-01, etc.).
Promissory notes and installment agreements – Schools that accept promissory notes or payment plans are bound to honor them and may not withhold grades while the agreement is being complied with in good faith.
Bar, board, and licensure examination candidates – The Professional Regulation Commission (PRC) and the Supreme Court (for bar examinees) require submission of TOR/diploma. Persistent withholding that prevents a graduate from taking licensure exams may be challenged via mandamus, and courts have occasionally ordered release on equitable grounds.

Proposed Legislation (Status as of 2025)

Several bills seeking to completely prohibit “No Permit, No Exam” policies and withholding of credentials across all levels have been filed since the 16th Congress:

Senate Bill No. 1503 / House Bill No. 10890 (18th Congress) – “Free Final Examination Act”
Senate Bill No. 1358 (19th Congress) – “No Permit, No Exam Prohibition Act”

As of December 2025, none of these bills have been enacted into law. The practice therefore remains prohibited in DepEd K-12 schools (with the limitations described above) but generally permissible in private higher education and TVET institutions.

Conclusion

In basic education, both public and private, DepEd policy is clear and strictly enforced: students must be allowed to take examinations regardless of financial status, and graduating students must receive their diplomas and permanent records without delay.

In tertiary education and private TVET, however, schools retain the legal right — consistently upheld by the Supreme Court for over three decades — to withhold transcripts, diplomas, and other credentials until all financial obligations are settled.

The divergence reflects the State’s stronger constitutional duty to protect access to basic education as a fundamental right, versus the contractual nature of private higher education. Until Congress enacts a nationwide prohibition, the current regime — protective in K-12, permissive in college — will continue to govern Philippine schools.