Illustrative photo (Photo: The courtesy of the SLF) Bangkok (VNA) – The Thai government has been rolling out measures to solve the debt problem of the Student Loan Fund (SLF), including reducing the interest rate and the fine for defaulting to help 3.5 million borrowers pay back their loans, spokesperson of the government Chai Wacharonke said on March 30.
The SLF is a government programme that provides loans to students who cannot afford to pay for their education. The loans are typically repaid over 15 years.
Chai said the SLF now has over 3.5 million active borrowers who owe some 454.64 billion baht (12.4 billion USD). The fund also has over 5.3 million past borrowers who have yet to close their accounts – around 49% of this group were already defaulters facing legal action.
He said the SLF’s debt problem is due to several factors, including the economic downturn, the rising cost of living, and the difficulty in finding a job after graduation.
Prime Minister Srettha Thavisin has tasked related agencies with finding measures to help borrowers pay back as much as possible, said Chai.
A special governmental committee responsible for tackling debt problems of the general public approved the move to let the SLF cap the interest rate at 1% annually and limit the fine for default to 0.5% annually to make it easier for borrowers to settle their debt.
Chai said the SLF has also adjusted its repayment calculation model to prioritise capital before interest. This results in lower overall interest and therefore allows more borrowers to close their accounts immediately, while those who had already paid interest before the adjustment will be granted a refund.
The committee also ordered the SLF to remove loan guarantor requirements from 2022 to facilitate loan applications by new borrowers and minimise legal complications and expenses in case of repayment default, Chai added.
The SLF on February 15 deployed a debt restructuring programme for borrowers who have difficulty repaying their debts./.
