No-interest study loans a ‘vote ploy’

No-interest study loans a 'vote ploy'

Rules relaxed for delinquent students

House Speaker Chuan Leekpai yesterday rebuked a proposed variation to the Student Loan Finance (SLF) Act as an attempt to curry favour with voters, saying the fund need to come up with ways to advertise repayments among borrowers.

His remarks followed approval of the bill with the House to amend the law resulting in interest-free loans for debtors, no fines for those who default on their payments and no requirement for the guarantor.

The bill, which has drawn flak through critics that it would certainly lead to more fails and undermine the liquidity, is impending scrutiny in the United states senate. If the Senate rejects it, a shared committee between the two chambers will be setup to examine the expenses.

Chuan: Fund created when PM

The move was designed to assist defaulting ex-students prevent legal action. According to the loan fund management, about 2 . five million borrowers failed to repay their financial loans by the due date, construction for 90 billion dollars baht in primary payments.

Mr Chuan said the fund has confronted defaults lately mainly because some education institutions advised students to not repay.

“I knew because a borrower thanked myself for the opportunity. I asked them if he completed your debt repayments. He informed me he didn’t because the university advised him and it is a privately run university.

“If we all look at the figures, defaults by students at privately run organizations are high. Financing is important, and so is usually financial responsibility, ” he said.

Mr Chuan said the fund, which was established 20 years back with a three-billion-baht spending budget when he was the prime minister, had been intended to help bad students and it was a success in reducing an education chance gap.

When it started lending, the loan account, which was designed as being a revolving fund, was able to cover about 70, 000-80, 000 students. Currently, it has given 690 billion baht in total to 6. 2 million learners.

He or she said the interest-free loan was deemed to be an attempt to woo votes but he believed curiosity payment had its merit in that it might promote financial discipline and engagement among borrowers. Moreover, the fund also produced revenue from the curiosity, which is essential in sustaining its liquidity.

Khunying Sudarat Keyuraphan, head of the Thai Did Thai Party, said the amendment was a populist scheme aimed to attract ballots without considering its consequences.

The girl said that instead of focusing solely on curiosity, loan defaults needs to be addressed systematically. While loans could be offered, interest-free measures ought to be in place to encourage people to continue paying down their loan and stop defaults.