New plan to tackle teachers' debt

New plan to tackle teachers' debt

The government has come up with plans to solve the worsening debt problem faced by 900,000 teachers nationwide, with total debts worth a staggering 1.4 trillion baht, according to deputy government spokeswoman Ratchada Dhnadirek.

About 890 billion baht is owed to teachers' savings cooperatives, followed by the Government Savings Bank, which holds some 349 billion baht or 25% or all teachers' debts. Ms Ratchada said the Education Ministry will work with state-run financial agencies to implement the teachers' savings cooperatives model in 12 areas -- three each in four regions. Later, the project will be expanded to other regions.

The ministry's debt solution committee will negotiate with financial institutions to help alleviate teacher debt burdens, by seeking guarantors to underwrite their debts and loan interest reductions. Financial management education sessions have been launched, targeting 100,000 teachers each year.

A study of teachers' savings cooperatives in Samut Prakan and Kamphaeng Phet showed lowering the deposit interest rate to 3%, as well as cutting loan interest rates to 4.5-5%, helped reduce the debt burden. The study also suggested the ministry restructure the debts of teachers who are 50 and older, and reduce loan rates for teachers aged 75 and older to 0.25%-0.50%, Ms Ratchada said.

Meanwhile, the Student Loan Fund has also increased its borrowing ceiling for 700,000 students in the 2021 academic year from 38.5 billion baht to 40 billion baht, to alleviate the impact of Covid-19 on education.

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