Graduates forced to repay student loans
People who have taken out government-issued student loans will have the outstanding balance deducted from their monthly salary automatically in order to repay the debt in full by next year at the latest, according to Student Loan Fund (SLF) manager Chainarong Katchapanan.
The policy covers state officials and company employees, Mr Chainarong said.
He said 570 billion baht from the SLF was loaned to 5.4 million people from 1996 to last year, with 68.3 billion baht still outstanding.
Between 2004 and 2017 some 1.1 million borrowers faced lawsuits as they defaulted on their repayments, he said.
Mr Chainarong said the SLF Act, which was amended last year, makes it obligatory for private firms and state organisations to deduct the salaries of state officials and corporate employees and pass the money on to the Revenue Department.
The practice will be applied to officers from the Comptroller-General's Department first before it is rolled out to other state agencies, he said.
By October or November civil servants and employees of state agencies who have not repaid their student loans in full will be subject to the new measure.
Of the 2 million state officials spread across the country, 10% still owe the SLF money, according to its manager.
Private companies that have employed graduates who remain mired in debt are obliged to pass on their information to the SLF if requested, Mr Chainarong said, citing Section 46 of the Act.
He said employees or state officials must report the status of their loans to their organisations and allow the SLF to gain access to their personal information.
According to the fund manager, debtors will have to pay a low interest rate of 1% for the first year, after which the annual rate will climb progressively.
CGD director-general Suthirat Ratanachot said Finance Minister Apisak Tantivorawong has instructed the SLF to notify debtors in advance that their salaries will be deducted.
She said the fund will keep supporting the education of young adults.