The Finance Ministry has a problem. In fact, according to figures it made public last week it has about two million problems. That is the number of ex-students the ministry has on record who have borrowed a total of 55 billion baht, including interest, and cannot or will not repay it. The ministry has proposed a startling new penalty to try to get the money back.
It is clear this is a serious problem on several levels. It also seems the figures released by permanent secretary of finance Somchai Sujjapongse are somewhat imprecise. For starters, there is no indication of any breakdown of categories within the group of two million long-term debtors. Before setting out to try to recover the outstanding loans, Mr Somchai and the ministry should know who cannot pay, and who are simply deadbeats.
The ministry has launched lawsuits against some 800,000 of the chronic non-payers. Ministry policy for now is to sue those who have completed their education and are employed. But that leaves 1.2 million of undefined status. It is important to determine who are truly ungrateful scofflaws, and who are unable to pay. There are many possible reasons, ranging from illness and death to money problems of other sorts.
Mr Somchai has proposed that tough new rules target confirmed deadbeats. He has recommended to his minister, Apisak Tantivorawong, and Interior Minister Gen Anupong Paojinda that the national identification cards of non-payers be cancelled. If this is approved, each delinquent debtor would have his or her ID card annulled, and renewal would not be allowed until repayment of the student loan was confirmed.
The Finance Ministry wants to see if this violates the constitution, which certainly seems likely. But there are other good arguments that Mr Somchai should pursue other avenues. The first is there is no coordinated checks on ID cards, and anyone with a cancelled card could continue to use it; thus, no real punishment.
Similarly, there exists no system for reinstating defunct ID cards, since such a penalty is mostly unknown. The bureaucracy of renewing and reissuing previously cancelled ID cards would put heavy stress on the Interior Ministry. Thus, aside from effectively trying to strip basic citizenship from people for owing money, this punishment would spread the pain widely, up and down government channels.
Mr Somchai said he has signed an agreement with the Social Security Office, which is able to tell him whether student-loan debtors have a current job. If so, Mr Somchai can pursue them by attaching their salary or personal social security fund.
Garnishment, as it is also known, can be highly successful. The US Department of Education has just released a report saying it has hired debt collectors, who convinced judges to attach the wages of defiant defaulters. They collected $176 million in three months.
The focus on the student loan fund comes after the recent case of the Harvard dentist who effectively absconded and left "friends" to pay off her 36 million baht in loans and interest. It is disappointing to learn so many other students are so ungrateful for the help of taxpayers that they ignore their legal, signed debts.
The Finance and Interior Ministries must also bear in mind there are existing legal remedies to pursue deadbeat borrowers. It is no doubt frustrating to chase them, but cancelling their national ID cards is a step too far.