The government is launching a new bid to tackle the serious debt situation facing school teachers and educational personnel across the country.
A memorandum of understanding (MoU) was signed yesterday between the Office of the Welfare Promotion Commission for Teachers and Educational Personnel (OWPCTEP) and 16 teachers' savings co-operatives in the North and the Northeast selected for piloting a debt refinancing programme.
In this pilot phase, about 1,000 of the 35,000 teachers who are facing bankruptcy suits over their unpaid debts will be selected to join the programme, said Pitsanu Tulasuk, a deputy permanent secretary for education in his capacity as secretary-general of the OWPCTEP.
The participating teachers have to agreed to have all of their debts transferred to the debt refinance programme, repay their debts through participating teachers' co-operatives at 3.5% per year, and not to incur any new debts.
Mr Pitsanu said he hopes the pilot project can start this month. More debt-stricken teachers and provincial teachers' saving co-operatives, as well as those from other parts of the country, will be included in this programme later.
About 1.4 million teachers and educational personnel nationwide are indebted, he said, adding each of them has on average 1.5 million baht to 2 million baht in total debts, he said.
Altogether, the debts incurred by the 1.4 million teachers and educational personnel were about 1 trillion baht, he said. About 35,000 of them are considered as having a debt crisis as they are facing lawsuits to declare them bankrupt, he said.
About 10 teachers and educational personnel from each province are expected to be selected to join in the pilot project nationwide, Mr Pitsanu said. "We hope the better quality of life for teachers which we're trying to bring about will be reflected in an improvement in the quality of their students," he said.
Earlier last year, the government introduced a project aimed at mitigating the debt burden of teachers and educational personnel nationwide.
Under the project, the participating debt-ridden teachers and educational personnel were required to agree to use future benefit payments to their families as collateral to secure soft loans from Government Savings Bank (GSB) to pay off their debts. The payments which the families receive include money from the cremation welfare fund run by the OWPCTEP and inherited benefit payouts.
They then begin repaying their new debts with the GSB plus a 4% annual interest rate, which is lower than the interest rates they were previously paying for their debts, which ranged from 5.58% to 6.7% per year.
An MoU was signed last September between the Finance Ministry and the Education Ministry to let the GSB offer soft loans to debt-stricken teachers to refinance the debts they owe to the bank. Finance Minister Apisak Tantivorawong said 283,000 indebted teachers were expected to benefit. He said the soft loans should help reduce debts which amount to 250,000 baht on average per teacher and will cut their monthly repayment burden by 1,200-2,400 baht.