Student loan applications reach record high
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Student loan applications reach record high

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The number of students applying for loans from the Student Loan Fund (SLF) rose to 837,000 for the 2024 academic year, a new record high attributed to the economic downturn.

Chainarong Katchapanan, the fund's manager, said the SLF raised the educational loan budget for 2024 from the original level of 48.3 billion baht to 51.2 billion to accommodate the increase in applications, rising from 769,000 last year to 837,000.

In the 2023 academic year, the SLF provided loans amounting to 45.7 billion baht for 751,000 students.

The number of applicants this year is the highest since the SLF was established 28 years ago.

He said this uptick is likely caused by the economic slowdown, as SLF loans carry a low interest rate of 1%, easing the financial burden for parents.

Regarding debt restructuring for SLF borrowers under the new SLF law, the penalty for late payment was reduced from 7.5% to 0.5%, while the requirement for a guarantor was removed and the order of debt repayment adjusted.

Previously, overdue interest had to be paid first, followed by interest on the current instalment, then the principal.

The new order requires principal repayment first, followed by interest on the current instalment, with any remaining amount applied to overdue interest.

Mr Chainarong said since the new SLF Act came into effect early last year, 168,000 borrowers have applied for debt restructuring out of 2 million total delinquent borrowers.

He said some of these borrowers found under the new repayment order they had overpaid, which amounts to 2 billion baht that needs to be returned to them.

For debt restructuring, the SLF extended the repayment period by another 15 years and waived all penalties if the debt is fully repaid within 15 years.

For 2024, the SLF received 23.3 billion baht in debt repayments, a 5% decrease from the previous year.

Mr Chainarong said this decrease is likely because SLF borrowers prioritised other debts with higher interest rates first, while retaining the SLF debt with a 1% interest rate.

This year marks the first time the SLF is offering loans for individuals seeking to reskill and upgrade their skills.

Under the new law, loans can be provided for upskilling or reskilling in private educational institutions, such as short courses at elderly care schools or short hotel management courses to qualify for work on cruise ships.

These professional skills are in great demand, he said.

In fiscal 2025, the state-operated SLF requested a budget of more than 10 billion baht for educational loans, which was reduced to 3 billion.

The fund is confident it can provide loans to all students who need them, with an average loan of 120,000 baht per student, said Mr Chainarong.

As of July 31, according to SLF data, there have been 6.86 million borrowers since the inception of the fund. Of these, 53% or 3.63 million are currently repaying their loans, while 18% or 1.24 million are in a grace period (still studying or unemployed), 28% or 1.91 million have completed their repayments, and 1% or 73,400 borrowers died or became disabled.

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