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Student Loan Bt200 Billion Forgiveness Plan Debated in Thailand
A student loan forgiveness campaign believes the 700 billion baht budget Thailand has set to reduce inequality should be more than enough to ensure free education.
During an interview with Thai PBS, Prim Maneechote, a member of the #SLFdebtforgiveness campaign said, “It is not about Thailand’s financial situation but its allocation of resources.”. The purpose of this platform is to bring teachers together to share their experiences and ideas
According to Prim, millions of Thais owe Student Loan Funds (SLF) money that should not be considered loans.
“If the government had offered free education, they wouldn’t have had to borrow money,” Prim said. “Why do people have to take loans just because they want to learn?”
According to the BBC, a professor at Thammasat University’s College of Interdisciplinary Studies, Assoc Prof Dr Sustarum Thammaboosadee, holds a similar view.
As part of its plans to reduce inequality, the government plans to allocate 700 billion baht in the upcoming fiscal year [starting October 1]. The budget for monthly basic welfare, and Medicaid subsidies, is separate from the budget Dr. Sustarum said.
In his calculation, it would cost only 150 billion-200 billion baht a year to cover education and living expenses for all Thai university students.
Because of this, neither Prim nor Sustarum can comprehend why most people think debt forgiveness for a student loan is “cheating” or “irresponsible”.
There is no demand for debt forgiveness for certain individuals. “The point we are making is that the SLF loans have a high degree of inequality,” Prim explained. Currently, she is running a campaign on welfarewillwin.com.
According to Prof Sustarum, the campaign sought not only to annul SLF debts, but also to provide free education and living expenses.
According to Prim, Thailand’s capitalist society needs quality human resources to sustain its economy, especially as the countries society ages. Educated people earn more and can therefore pay more taxes, she said.
All Thai citizens receive free education starting from kindergarten, but university education is not included.
According to Pumsaran Tongliemnak, acting director of the Equitable Education Research Institute (EEFI), all citizens should have access to free higher education.
The truth is, few countries provide this service. Why is that? Because normally, university students are expected to bear the cost of their own education. However, the amount each country shoulders depends on its policy.
In the aftermath of the 1997 financial crisis, the Thai government took a loan from the Asian Development Bank and turned Thai universities into autonomous organizations.
To qualify for the loan, the government had to cut subsidies to state universities. Educators and economists at the time argued most families could afford to pay for the education of 1.4 million Thai university students without government subsidies.
The cost of studying at university has skyrocketed in Thailand
There has been a significant increase in university tuition fees over the past few decades. Thus, I think it is difficult to push the government to start paying for people’s higher education,” Pumsaran said. It is important to note that tuition fees for some fields are almost equal to those abroad.”
The SLF – which offers soft loans to students – receives no government funding now, so it needs the repayments if it is to continue to exist.
In response to US President Joe Biden’s decision to forgive student debt, he said the United States would only forgive the debts of the very needy.
Pumsaran believes that SLF needs only a little tweak, like lifting the hefty penalty attached to defaulters. According to him, it could only write off debts or offer student loan refinancing with government approval and financial assistance.
In 1996, Nalinee (last name withheald) took an SLF loan of 165,000 baht to fund her university education in Thailand. Unfortunately, she was unable to secure a permanent job after graduating, so she was unable to pay back the loans.
“There is a grace period, but I didn’t earn enough to pay it back afterward even with a student loan consolidation,” she added.
A lawsuit was filed against her by SLF after she defaulted on her payments. In 2018, she was stunned to learn that her student loan debt had grown to 428,059.13 baht.
The interest rate on the loan was only 25,802.91 baht, however, the penalties for defaulting on the student loan were a staggering 237,256.22 baht.
A lawyer representing SLF demanded she pay 4,000 baht a month for nine years to cover the loan.
“I begged them to reduce it to 2,000 baht a month, but they refused,” Nalinee said. As a result, I’m having difficulty making ends meet right now.”
Jekita Limwichian, a 31-year-old medical sales representative, said SLF required her to pay just 3,000 baht a year initially and now it’s just a small amount monthly.
The principal amount of my debt has dropped from over 200,000 baht to 180,000 baht. I won’t be able to repay the entire amount right away because I also pay for my car and house on a monthly basis.” she added.
According to Jekita, SLF is a valuable resource for children who want to further their education. If the loan hadn’t been provided, she said she wasn’t sure if her parents would have been able to send her to university.
She added, “My younger sister wants to study nursing, and she will also apply for an SLF loan.”.
It is her opinion that SLF loans should only be forgiven for those who are unable to repay them.
What politicians are saying about student loans
In a recent speech, Move Forward Party leader Pita Limjaroenrat stressed that the government should provide free university education if funds were available.
Additionally, he proposed solutions to the student debt issue.
“Thailand may be able to offer more generous repayment terms by capping interest and penalties at 1% per year. It would be ideal if the government waived interest or penalties,” he said.
The Bhumjaithai Party leader, who is also the Minister of Public Health, has vowed to push for interest-free student loans in Parliament.
