It's a tough lesson
Debt-ridden teachers are being urged to learn to control their finances
Despite his 42,000 baht salary and extra allowances, each month Mr Namchoke, a 39-year-old teacher at a famous school in Bangkok who wants his real identity kept secret, has only 3,500 baht left to cover his personal expenses after his debts are paid.
Mr Namchoke said his debt burden totals 5 million baht and comes from a 3-million baht loan with the Government Savings Bank (GSB)'s programme for members of teachers' funeral funds and a 2-million baht loan from the Teacher Savings Cooperative (TSC).
He said the loans were to cover the costs of his mortgage, car and investment in a business which went bad.
"Some months ago, I had to borrow money from friends and family members to survive because 3,500 baht is not enough. I also moonlight to earn extra money, but the income is not yet stable," he said.
Ms Kannikar, 44, another teacher who also wants to withhold her name, in Bangkok, said her financial situation is even worse than Mr Namchoke's because her debts are larger. She owes 6 million baht debt to the GSB and TSC.
"My 40,000 baht a month salary is 10,000 baht less than I need. So I struggle and have to do extra business here and there to make ends meet," she said.
Ms Kannikar said she borrowed the money to buy a house and cars several years ago because she wanted to have what other teachers have.
Mr Namchoke and Ms Kannikar are just two examples of thousands of teachers in Thailand who struggle to manage their money and find themselves at risk of spiralling into an ever-worsening cycle of debt.
According to the Education Ministry, the total amount owed by teachers to the GSB and various cooperatives is estimated at 1.2 trillion baht.
The GSB alone has lent 410 billion baht to 450,000 teachers or, on average, one million baht to each teacher. But most teachers also have low-interest loans from other sources such as cooperatives, the teachers' welfare fund and funeral loan schemes. It is estimated that each teacher may be up to three million baht in debt.
MAHA SARAKHAM DECLARATION
About a hundred debt-ridden teachers recently launched a campaign and staged a rally in Maha Sarakham and Nakhon Ratchasima calling for the government and the GSB to give them a six-month moratorium on debt repayment to the Funeral Service Welfare for Teachers and Education Personnel fund.
The group, who said they were suffering from overwhelming debts with the fund, urged 450,000 borrowers nationwide to stop repaying these debts from Aug 1 to further pressure the government.
After that six-month grace period, starting on Oct 1, the group also demanded that the annual interest charged on the fund's debtors be lowered from 5-7% to 1%, as was applied to the government's loans to farmers.
Ouychai Watha, head of the group, said the declaration was a symbolic gesture and claimed that teachers' indebtedness was not caused by their inability to service their debts alone but also stemmed from the debt structure and interest calculation.
Mr Ouychai said for the past seven years he had paid monthly instalments of over 7,000 baht on the 1.2 million baht he borrowed. Though the capital amount owed had been reduced by 100,000 baht, it left him still owing 1.1 million baht.
He said that others who had also borrowed from the fund were made to buy 10-year insurance policies, paid for through a single payment of between 80,000-200,000 baht. He said neither the fund nor the GSB offered an option that would allow the debts to be paid off faster.
Following the declaration, the GSB said it would take legal action against defaulters and warned teachers nationwide to accept their obligation to repay the debts because anyone who fails to make good on a debt exceeding 1 million baht could be forced into bankruptcy for three years, along with any guarantors.
WHY ARE TEACHERS DEEP IN DEBT?
Pinitsak Suwanrang, secretary-general of the Office of the Teacher Civil Service and Educational Personnel Commission (Otep), suggests that easy access to funding with few strings attached is the main reason for the problem.
"Teachers are not required to undergo credit checks with the National Credit Bureau before borrowing money from the GSB's loan programme for members of teachers' funeral funds or the Teacher Savings Cooperatives. Moreover, Every teacher who is a member of a teachers' funeral fund, is allowed to borrow up to 3 million baht even though their salary might be as low as 15,000 baht a month," he said.
"It is not uncommon to find debt-stricken teachers continuing to buy various expensive consumer products on hire-purchase, which further aggravates their debt problems.
In Thai society, "Face is very important to gain respect and recognition," Mr Pinitsak said.
However, Mr Pinitsak said the group of teachers who want to halt their debt repayments represent just a minority and that the majority of their profession do not agree with them.
ARE TEACHERS' EARNINGS TOO LOW?
Many teachers who are threatening to stop repaying their loans have claimed that they are paid far less than those in many other professions, so they have to borrow money to cover expenses.
In response to this, Mr Pinitsak said the salaries of teachers in Thailand are not low at all. In fact, salary ranges can be anywhere between 15,000 to almost 70,000 baht a month depending on their position.
"The salary of an assistant teacher, the lowest level of the profession, is between 15,050 and 24,750 baht which is actually higher than many professions," he said.
To prevent undisciplined teachers from borrowing more money, Mr Pinitsak believes the Funeral Service Welfare for Teachers and Education Personnel fund and Teacher Savings Cooperatives nationwide should tighten the criteria for their loans by requiring them to undergo credit checks with the National Credit Bureau first.
Next, the government should help improve teachers' financial literacy.
Mr Pinitsak added that it's also important for teachers to understand the sufficiency economy theory.