Students, teachers, SMEs to get help
PUBLISHED : 16 Nov 2023 at 06:32
The government will announce a new debt relief package for several groups, including former students repaying their student loans, teachers and small- and medium-scale business owners, Prime Minister Srettha Thavisin said on Wednesday.
The package, also to be made available to those paying off loans to non-bank creditors, may come towards the end of this month, he said.
On Tuesday, new guidelines were drafted by the government committee set up to solve debt problems.
They are aimed at helping former students struggling to repay their loans to cope better with their debt repayments.
The guidelines were also expanded to cover major debt problems faced by many other groups, which will be addressed in the new debt relief package to be announced soon, said the premier.
Lawaron Saengsanit, permanent secretary for finance and also chairman of the Student Loan Fund (SLF) board, said a new regulation has been introduced allowing the SLF to adjust the criteria for calculating loan repayments, which will reduce the overall debt amount.
Under the new rule, student repayments would initially go towards deducting the principal sum first. Only in the later periods would the repayments be used for the deduction of interest and any late repayment fee.
This represents a reversal in the order of deductions from the previous repayment criteria. The new order will translate into significantly smaller repayment amounts, according to Mr Lawaron.
The new rule takes effect immediately and the 3.5 million student loan borrowers stand to benefit from it. Their loan repayments are in the process of being revised.
With the new SLF repayment calculation, some long-term borrowers may also have found they are already over-repaying their loans and can claim back the surplus amounts, according to Kittirat Na Ranong, chief adviser to the PM.
Those who have paid more than they should can get their money back, thanks to a new rule which came into effect on March 20, said Mr Kittirat, a former finance minister.
The new calculation method will also rescue some SLF debtors facing foreclosure as their loan amounts will be substantially cut. Around 46,000 of them may avoid the seizure and repossession of assets.