The Senate's version of the controversial amendment to the Student Loan Fund (SLF) Act, in which the Upper House decided to retain interest and fines for defaulters, was given the all-clear by the House of Representatives on Wednesday despite strong opposition by several MPs.
The bill was put to a vote and approved after four hours of heated debate. The vote was 226 in favour of the Senate-amended bill and 11 against, with 60 abstentions.
The Senate made changes to the bill, which include retaining a charge of 1% interest on loans per year and making defaulters pay a fine of 0.5% annually, as opposed to the no-interest and fine-free version of the bill previously proposed by the Lower House.
The Senate, however, left untouched a part of the bill which frees loan seekers from having to find a guarantor.
Resisting the changes was the Bhumjaithai Party which insists the SLF must not charge interest or fines. The party declared the Senate's amendment ran counter to its stance and as a result decided to abstain from the vote.
Initiated on Jan 16, 1996, the SLF charges borrowers 1% per year even though the current law sets a maximum interest rate for student loans at 7.5% per annum. The maximum monthly default fine is capped at 7.5% and the repayment period is 15 years.
Kowit Phuang-ngam, a list MP of the Thai Local Power Party, said during yesterday's debate on the Senate-amended bill that he found the interest and default fine rates amended by the Senate somewhat acceptable.
He felt it would be better for him to vote for the bill as borrowers might be in trouble if the bill was not passed in the current session.
A group of MPs from Bhumjaithai, which sponsored the bill, called a press briefing to denounce the Senate's decision.
They said all of the party's MPs had abstained from voting on the Senate-amended draft in protest.
The MPs stood firm on the party's stance that student loans must be interest-free and free of defaulter fines. They said if Bhumjaithai returns to government after the next election, it will definitely seek to amend this law again.