Student loan bill in Senate

Student loan bill in Senate

The Senate will today consider whether to accept a controversial bill seeking to amend the Student Loan Fund (SLF) Act to waive loan interest and cancel fines against defaulters at its first reading.

Senator Somchai Harnhiran, who heads a Senate committee on economic and financial affairs studying the bill, said the measure has some merits such as allowing the SLF committee to offer help to cash-strapped borrowers or graduates who remain jobless.

But the committee disagreed with the proposal to cancel loan interest and fines as it would lead to a lack of financial discipline and impose a burden on state coffers, he said.

The committee agreed that loan interest and fines should be retained, but at low rates to make it easy for borrowers to repay their debts, Mr Somchai said.

Asked whether the Senate will reject the bill in the first reading, Mr Somchai said each senator will use their discretion in voting.

He said the bill is expected to be thoroughly debated before the Senate decides whether to accept it.

If the bill is accepted, the Senate will set up a committee to vet the bill -- a process which will take 30 days, Mr Somchai added.

The bill cleared the House in the third reading on Sept 14. Critics say the legislation, sponsored by the Bhumjaithai Party, damages people's financial discipline and undermines the SLF's liquidity.

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