It is a well-known fact that a large number of teachers in this country are heavily loaded with debts, both formal and informal. The chronic debt problem is so bad that some fear the quality of education in Thailand may be affected because teachers themselves appear to be more concentrated on finding the money to pay their debts than on teaching.
The National Institute of Educational Testing Service (Niets) organised tests in nine core subjects for 179,968 Mathayom 6 (Grade 12) students for the year 2016.The results show most students failed eight out of nine subjects. The poor test scores speak volumes about the quality of education of Thai students and, possibly, the quality of the teachers as well.
The Government Savings Bank (GSB), the biggest creditor to educators, is reported to have lent about 470 billion baht to teachers nationwide. But on top of that, most teachers also took out loans from teachers' cooperatives, teachers' welfare funds and funeral schemes. Because of the easy access to money and very few strings attached to the loans, it is estimated each teacher may be up to 3 million baht in debt.
Thai teachers, as well as university lecturers, are not as well paid as their colleagues in Malaysia or Singapore, not to mention those in the United States or Europe.
With their low salaries, several lecturers teach at more than one university while many teachers put in extra hours by tutoring. Even so, the debt burden is so overwhelming that teachers' organisations have occasionally asked for government help.
On Tuesday, the Finance Ministry in cooperation with the GSB proposed a refinancing scheme to the cabinet. The proposal would allow indebted teachers to use their savings from funeral-service schemes or funds for their heirs as collateral to get new loans from the GSB to repay their debts.
The cabinet approved the proposal in principle, but asked the ministry to revise details as it is concerned the new loans will not be used to refinance the teachers' debts. The cabinet also wants the GSB to cut the interest rate from between 5.85-6.7% to a flat 4% for the new loans and tighten up the lending conditions to make sure they are used exclusively for refinancing purposes.
What is more interesting about this refinancing scheme is that teachers who take out loans from the GSB need not have to repay the new loans throughout the contractual periods.
The Finance Ministry's refinancing scheme will not solve all the teachers' debt problems, but it will help relieve the debt burden, reportedly by between 2,000-4,000 baht per head per month.
This is not a huge amount but it means the indebted teachers will have more take-home pay for themselves and their families instead of it being taken away by creditors.
It is more complicated and time-consuming to help teachers settle informal debts with money lenders. But that does not mean the government should just sit idly by and do nothing.
With its powers in hand, the military junta can summon the money lenders for talks with their debtors to cut the exorbitant interest rates to an acceptable level.
But in the end, the teachers themselves must change their habit of spending beyond their means. At the very least, they should practice the sufficiency economy philosophy because they cannot rely on the government to rescue them.