Activists call for student loan reform

Activists call for student loan reform

Dome Revolution Party submits petition to House Speaker

Krungthai Bank staff explain how students can repay their education loan using QR codes, at the Finance Ministry in Bangkok last year. (File photo)
Krungthai Bank staff explain how students can repay their education loan using QR codes, at the Finance Ministry in Bangkok last year. (File photo)

Student activist group Dome Revolution Party called for reform of the current Student Loan Fund Act in a petition submitted on Thursday to Parliament President and House Speaker Chuan Leekpai.

The group submitted the petition at the TOT Plc auditorium, where the parliamentary debate on the new government's policies is being held.

The group's petition was received by Prachachat Party MP Kamolsak Leewamor, who promised to raise the matter during the parliamentary meeting.

In the letter to Mr Chuan, the activist group requested an amendment to the current Student Loan Fund Act, arguing that it places too much financial burden on graduates and violates borrowers' rights.

Natchanon Piroj, the leader of the group, said there are five major problems with the current Student Loan Fund Act. The first is that the student loan interest rate under this act has been increased from 1% per year to 7% per year.

Another issue the activists see as problematic is the ability of the Student Loan Fund (SLF) to access borrowers' personal information including their bank account numbers, account balances and information about other assets they are holding. Moreover, the act also forces debtors to declare student loan debts to their employers, Mr Natchanon said.

Additionally, the act requires all borrowers to find a guarantor who is a high ranking government official, such as a school or college administrator or a local government officer who is at least a village headman.

"Many students, especially those who are underprivileged, are now struggling to find their guarantors," he said.

Mr Natchanon said another problem is that the act stipulates that all borrowers must participate in SLF-approved volunteer activities for at least 36 hours each year.

"Many borrowers have to keep part-time jobs and study at the same time, so they should be able to manage their own schedules, and shouldn't be forced to join activities required by the SLF," he said.

Mr Natchanon said that he also received complaints from several borrowers that the funds from their student loans often came late, and in some cases students had to wait up to four months for the money to appear in their bank accounts.

"We want all five of these problems to be fixed as soon as possible," he said.

Mr Kamolsak said he has already acknowledged these problems and will raise the matter at the parliamentary meeting, together with other MPs from the opposition camp.

According to the SLF, the fund has loaned about 5.4 million students over 570 billion baht since 1996. About 800,000 of those students have fully repaid their debts, while another 50,000 debtors either died, became disabled or were eventually assigned to the non-performing debt group.

There are currently about 4 million debtors active in the system. Two million of those debtors have missed some payments in the past decade.

Of the 2 million debtors, 1.2 million people have been sued by the SLF over their combined debts of 48 billion baht. However, the rate of debt repayment has continued to increase and the fund expects to receive total payments of 26 billion baht this year, and 30 billion baht next year.

As for the students who need loans this year, the SLF has about 30 billion baht available for 730,000 students nationwide.

Do you like the content of this article?
COMMENT (1)