Teachers push back in Thai govt loan dispute

[webfact]

Teachers push back in govt loan dispute

By THE NATION

 

 

Educators deny avoiding debt payment, say they are being overcharged.

 

TEACHERS ARE rejecting accusations that they are trying to avoid repaying their debts as has been suggested by some senior officials and critics of their campaign. 

 

The group of about 100 teachers retorted that the woes from being deeply in debt had driven them to launch the campaign demanding the government intervene in their case. They say unreasonable terms for their loans under the Funeral Service Welfare Fund for Teachers and Education Personnel’s loan scheme are preventing them from quickly paying back what they owe. 

 

“People should study the details before making such accusations,” said Teaching Professional Network of Thailand president Auychai Watha. “Teachers are not avoiding repaying the loans, but we want the government to plan measures to sort the issue of some 500,0000 teachers facing overwhelming debts.

 

“Many of us didn’t get justice or fair treatment from the ‘helping teacher friends’ loan scheme organised by the welfare fund and the Government Savings Bank (GSB) because the interest rate charged to us was incorrect,” Auychai said.

 

 

Auychai said he still owes Bt1.1 million after paying a monthly instalment of over Bt7,000 for the past seven years to repay the Bt1.2 million he borrowed. 

 

The teacher leader said the group just wanted the government’s help to solve problems, just as they had helped farmers with a moratorium on debt repayments and a debt restructuring scheme. The teachers are also calling for the authorities to probe whether the GSB bank had taken advantages of the loan scheme participants, he said.

 

The 100-strong group had on Saturday urged 450,000 others to join them and stop repaying the debts to the scheme starting on August 1 in order to pressure the government and GSB to approve a six-month moratorium on debt repayments. They also called for the annual interest rate to drop to 1 per cent (from the current 5 and 7 per cent rates). The teachers also demanded that the National Legislative Assembly and the government set up a special committee to find solutions for the teachers’ overwhelming debts. 

 

However, GSB president and CEO Chatchai Payuhanaveechai said no additional assistance measures would be implemented for the teacher debtors. 

 

He said the bank had already launched multiple measures to help, including debt restructuring, a three-year moratorium on the capital loan amount and a low-interest loan for refinancing old debt. 

 

GSB in May had signed a Memorandum of Understanding (MoU) with the welfare fund to allow the debt restructuring with a one per cent reduction in loan interest. 

 

Under the MoU, debtors would continue to pay 5 per cent interest per year, with 4 per cent going to service debt and 1 per cent paying down the capital loan. On a debt of Bt1 million, the 1 per cent allocation would be Bt10,000. The debtor would be given a choice to either use that Bt10,0000 (or Bt833 per month) to repay the outstanding capital and so shrink it quicker, or could lower their monthly instalment (which includes payment for interest and capital) by up to Bt833 per month.

 

Despite the MoU, there remained the issue of both agencies needing to soon find a mutually satisfactory conclusion to deductions to the welfare fund’s capital. The capital fund had been depleted to repay the debts on behalf of teachers who had failed to make repayments for more than three consecutive months. 

 

GSB currently has 433,000 teacher debtors owing about Bt406 billion. 

 

In the first phase, the welfare fund organised with Krungthai Bank had covered about 50,000 teachers who borrowed a total of Bt12.9 billion.

 

Meanwhile, the Justice Ministry’s deputy permanent secretary, Thawatchai Thaikhiew, warned the teachers’ group that a grim outcome could result if they ceased to repay their debts, especially for those owing more than Bt1 million.

 

Thawatchai said they could be forced into bankruptcy for three years and drag their loan guarantors into bankruptcy too. If declared bankrupt, teachers would be disqualified for positions in the civil service as per the Government Teacher and Education Personnel Act 2004, he said. 

 

Source: http://www.nationmultimedia.com/detail/national/30350272

 

-- © Copyright The Nation 2018-07-18

 

[cornishcarlos]

57 minutes ago, webfact said:

Thawatchai said they could be forced into bankruptcy for three years and drag their loan guarantors into bankruptcy too. If declared bankrupt, teachers would be disqualified for positions in the civil service as per the Government Teacher and Education Personnel Act 2004, he said.

 

So are the government prepared to lose 450,000 teachers ??

I would say the teachers are in quite a good position to negotiate.

Not that I agree with them, you take out a loan, you pay it back at the rate you signed up for.

[z42]

433,000 teachers in a country of 70 million sounds like an awful lot to me (obviously some will be retired etc). But Thailand's state school classrooms many times have 40 plus students and sometimes even 60 in the classroom.

 

Something seriously amiss here, and am not only talking about the idiotic so called teachers who have been borrowing and living well beyond their means, and their means to pay the cash back.

[Sonhia]

I've no sympathy. 

 

Most, not all, do a bad job. Students are not provided with the proper education, equipment or  taught disipline plus respect. Setting an example is a far cry.

 

If teachers are supposedly struggling, then what about all the other work forces in other parts of industry?

 

I used to be employed at many different schools within Thailand and witnessed it all!!! 

 

Cry wolf comes to mind...

 

[aircooledflat4]

2 hours ago, webfact said:

They also called for the annual interest rate to drop to 1 per cent (from the current 5 and 7 per cent rates).

Lower the rate they’ll just borrow more.

[Bob12345]

1 hour ago, cornishcarlos said:

 

So are the government prepared to lose 450,000 teachers ??

I would say the teachers are in quite a good position to negotiate.

Not that I agree with them, you take out a loan, you pay it back at the rate you signed up for.

They might be prepared to lose these 100 teachers so the other 449,900 know they better repay their debts.

[rodney earl]

How about "live within your means/everyone is in charge of their own destiny"

[dinsdale]

2 hours ago, webfact said:

Auychai said he still owes Bt1.1 million after paying a monthly instalment of over Bt7,000 for the past seven years to repay the Bt1.2 million he borrowed. 

1,200,000-588,000=612,000. Get better rates off the mafia money lenders.?

[chopin2]

Young thais need to learn not to live beyond their means and get stuck in debts. Their teacher going bankrupt and loose their job might be most important thing the teacher will ever teach the children????

[robblok]

58 minutes ago, dinsdale said:

1,200,000-588,000=612,000. Get better rates off the mafia money lenders.?

Care to retract that remark and do some calculations.. i though foreigners could calculate things well.

 

Here at 6% you see after 7 years he own about 1.1 million  (ok i should have calculated i per month but I am lazy but it would not change much)   Dont you hate facts ?  He should have paid more then 7000.. its just too low.

 

 

Edited July 18, 2018 by robblok

[klauskunkel]

4 hours ago, webfact said:

debtors would continue to pay 5 per cent interest per year, with 4 per cent going to service debt and 1 per cent paying down the capital loan. On a debt of Bt1 million, the 1 per cent allocation would be Bt10,000.

debt free in 100 years. Or did I miss something?

[Srikcir]

1 hour ago, robblok said:

Care to retract that remark and do some calculations.. i though foreigners could calculate things well.

 

Here at 6% you see after 7 years he own about 1.1 million  (ok i should have calculated i per month but I am lazy but it would not change much)   Dont you hate facts ?  He should have paid more then 7000.. its just too low.

 

 

How does your model compare to the terms of the MOU?

5 hours ago, webfact said:

Under the MoU, debtors would continue to pay 5 per cent interest per year, with 4 per cent going to service debt and 1 per cent paying down the capital loan. On a debt of Bt1 million, the 1 per cent allocation would be Bt10,000.

The 5% interest rate appears not to be solely for pay down of debt service interest. The "1 per cent paying down the capital loan" (aka "principle"?) seems to place a limit to payoff of capital. So it's confusing to me that the traditional loan model applies. 

[Chris Lawrence]

6 hours ago, webfact said:

Auychai said he still owes Bt1.1 million after paying a monthly instalment of over Bt7,000 for the past seven years to repay the Bt1.2 million he borrowed.

None were taught maths on purpose

[kannot]

6 hours ago, webfact said:

500,0000 teachers facing overwhelming debts.

half a  million stupid  people

[robblok]

5 minutes ago, Srikcir said:

How does your model compare to the terms of the MOU?

The 5% interest rate appears not to be solely for pay down of debt service interest. The "1 per cent paying down the capital loan" (aka "principle"?) seems to place a limit to payoff of capital. So it's confusing to me that the traditional loan model applies. 

In the other newspaper i read that teachers pay between 5 and 7 % so i took 6%. He started his loan 7 years ago.. a year before that time I had a loan too for about 6% in Thailand so the percentage does not seem to be that much off. 

 

I did not say this model was perfect (i set it up in 5 minutes). But it gives a good indication about the interest percentage. Does not seem to be that much higher then normal. It just looks bad because you always pay a lot of interest at the start of a loan especially if you only pay a small amount monthly.

[Chris Lawrence]

2 hours ago, robblok said:

Care to retract that remark and do some calculations.. i though foreigners could calculate things well.

 

Here at 6% you see after 7 years he own about 1.1 million  (ok i should have calculated i per month but I am lazy but it would not change much)   Dont you hate facts ?  He should have paid more then 7000.. its just too low.

 

 

so did I. Untangle the knickers Rob.

[robblok]

2 minutes ago, Chris Lawrence said:

so did I. Untangle the knickers Rob.

I don't get the remark. Sorry. Are you saying i calculated it wrong ? The model might not be perfect but it gives a good indication of the interest percentage used. Its certainly not as much as what money lenders use and is about the same i paid when I had a mortgage on my home in Thailand.  (was around the same time).  

[worgeordie]

 teacher debtors owing about Bt406 billion. that's some serious shit,

add what the farmers owe,other civil servants,and the general population,

that's a lot of debit,and without much collateral i suspect. 

regards worgeordie

[connda]

Back to predatory leading.

 

On average, we get a fraction of a percent interest on the money deposited into banks globally.  The banks still hammer consumers with usurious interest on loans.

The banks need to be paying depositors a fair interest rate, the spread between monies deposited in banks and loaned to consumers should not be usurious.  But in 2008, the Central Banks figured out how to screw us all with the governments of most countries complicit. 

[Araiwah]

It's just typical Thainess. They think as teachers they have a right to have a big house and big car and take advantage of an overly kind loan system. Then in typical Thai style they don't want to repay the loan. I've been teaching here for over 15 years and have seen this in every school I've worked at. In fact I don't believe I've met even one teacher who is trying to pay back their loan. They seem to think that if they just ignore the debt and carry on as normal it will all go away.

 

[DavisH]

4 hours ago, chopin2 said:

Young thais need to learn not to live beyond their means and get stuck in debts. Their teacher going bankrupt and loose their job might be most important thing the teacher will ever teach the children????

Driving a red plate car into the school grounds gives them lots of face. Most have cars at my school. They must live with their parents and their parents feed them, for them to be able to pay a car off. Most Thais live beyond their means. 

[futsukayoi]

I have never tried to take out a bank loan in Thailand but it seems to me that 4% interest (plus 1% to pay off capital) is actually very reasonable.  The US government has to pay over 3% to borrow money medium term and their chance of defaulting on repayments of interest or capital is close to zero.  The teachers themselves are admitting they are a group with a much greater chance of default and therefore need to be charged a much higher rate.  They are supposed to be role models and teaching kids about financial responsibility so there is no reason at all to treat them more tolerantly than anyone else.  If you have too much debt cut you living standard to what you can afford. educated people should be able to understand that.

[Kasset Tak]

3 hours ago, robblok said:

Care to retract that remark and do some calculations.. i though foreigners could calculate things well.

 

Here at 6% you see after 7 years he own about 1.1 million  (ok i should have calculated i per month but I am lazy but it would not change much)   Dont you hate facts ?  He should have paid more then 7000.. its just too low.

 

 

So, someone that (before the change of minimum salaries and in the beginning of his/her career as teachers) earned say maybe 9000 a month should pay more than 7000?!

The problem is that the banks and financial institutions have made it TOO easy for anyone that is employed by the government to borrow money. One of my former coworkers were making 25,000 a month while having to pay 27,000 in repayments and interests on her loans every month!? How can even the creditors/banks allow that to happen!?
 

[robblok]

5 minutes ago, Kasset Tak said:

So, someone that (before the change of minimum salaries and in the beginning of his/her career as teachers) earned say maybe 9000 a month should pay more than 7000?!

The problem is that the banks and financial institutions have made it TOO easy for anyone that is employed by the government to borrow money. One of my former coworkers were making 25,000 a month while having to pay 27,000 in repayments and interests on her loans every month!? How can even the creditors/banks allow that to happen!?
 

 

You put the blame at the bank, i put the blame at those who loan too much. That being said there is some responsibility from the bank too. When i worked at a stock brokers firm we had to inform the clients countless times about the risks otherwise we did not fulfill our duty of care. (Dutch law is quite strong). Anyway i feel that people should inform themselves too about what they loan and what they are getting into. In my country the banks are now quite careful and people are complaining about it that they can't loan as much as they want.

 

 

[mommysboy]

7 hours ago, Sonhia said:

I've no sympathy. 

 

Most, not all, do a bad job. Students are not provided with the proper education, equipment or  taught disipline plus respect. Setting an example is a far cry.

 

If teachers are supposedly struggling, then what about all the other work forces in other parts of industry?

 

I used to be employed at many different schools within Thailand and witnessed it all!!! 

 

Cry wolf comes to mind...

 

The background problem is inequality of wealth and a failing economic system.  In this respect, then, it's like the USA, and the UK, and probably many other countries.

 

People like to create a narrative around irresponsibility, fecklessness, stupidity, etc, or denigrate their contribution, but the overwhelming reason is exploitation- some people are utterly terrible with finances of course. 

 

Another big mistake is to assume the same propitious circumstances apply to Thai people as in the west 10-30 years ago: they don't; for that matter they don't exist back home at present.

Edited July 18, 2018 by mommysboy

[mommysboy]

1 hour ago, robblok said:

 

You put the blame at the bank, i put the blame at those who loan too much. That being said there is some responsibility from the bank too. When i worked at a stock brokers firm we had to inform the clients countless times about the risks otherwise we did not fulfill our duty of care. (Dutch law is quite strong). Anyway i feel that people should inform themselves too about what they loan and what they are getting into. In my country the banks are now quite careful and people are complaining about it that they can't loan as much as they want.

 

 

'i put the blame at those who loan too much. '

 

You mean borrow too much?

 

Maybe, but did they borrow for frivolous reasons as many would like to believe, or was it to sustain a reasonable standard of living- decent housing, feed the family, reasonable/essential possessions?

[robblok]

9 minutes ago, mommysboy said:

'i put the blame at those who loan too much. '

 

You mean borrow too much?

 

Maybe, but did they borrow for frivolous reasons as many would like to believe, or was it to sustain a reasonable standard of living- decent housing, feed the family, reasonable/essential possessions?

Sorry its a language mix-up I mean borrow. 

 

That has to be judged on a case to case basis but if you borrow money you have to pay it back. That is how I was raised, seems to be totally different here. My brother borrowed too much (dad bailed him out), never did we blame banks or loan institutes only my brother for getting in over his head. Its just how I am raised, just like when you use a service you pay for it as a business owner i see far too many people defaulting on debt and not paying invoices for services rendered. 

 

People always like to shift responsibility so they don't have to pay, maybe because i see it happen a lot and i see businesses get in trouble by people not paying up what is owned I am a bit jaded in how I look at things. 

[dinsdale]

6 hours ago, robblok said:

Care to retract that remark and do some calculations.. i though foreigners could calculate things well.

 

Here at 6% you see after 7 years he own about 1.1 million  (ok i should have calculated i per month but I am lazy but it would not change much)   Dont you hate facts ?  He should have paid more then 7000.. its just too low.

 

 

He's says he's been repaying over Bt7000 a month for 7 yrs. Let's say Bt7000. That's 84 months x Bt7000. This equals Bt588,000. Subtracted from Bt1,200,000 leaves a sum of Bt612,000. Now I'm not a maths person but to sill owe 1,100,000 after paying off 588,000 of an initial loan of 1,200,000 seems a tad more than 6%. He's only paid off Bt100,000 of the loan yet he's handed over Bt588.000. Please correct me if I'm wrong because as I said I'm not a maths person.

Edited July 18, 2018 by dinsdale

[robblok]

6 minutes ago, dinsdale said:

He's says he's been repaying over Bt7000 a month for 7 yrs. Let's say Bt7000. That's 84 months x Bt7000. This equals Bt588,000. Subtracted from Bt1,200,000 leaves a sum of Bt612,000. Now I'm not a maths person but to sill owe 1,100,000 after paying off 588,000 seems a tad more than 6%. He's only paid off Bt100,000 of the loan yet he's handed over Bt588.000.

No your not a maths person, just look at the calculation.. start first column is the loan principle, first year you pay 72.000 interest and just 12.000 on the loan, second year you pay a bit more on the loan 12.720 and so on and so on. 

 

Have you ever had a mortgage before ? if the amounts are fixed (like here) you pay a lot of interest in the first parts of the loan and pay little on the principle. Its called an annuity loan just google it. Many people have no clue about thee things but this is how those loans work all over the world. 

 

And don't feel bad your not alone, many people don't have a clue how this works.

 

I could have made it more clear with adding a column to see how much you pay off on the loan per year. It slowly increases 

Edited July 18, 2018 by robblok

[mommysboy]

29 minutes ago, robblok said:

Sorry its a language mix-up I mean borrow. 

 

That has to be judged on a case to case basis but if you borrow money you have to pay it back. That is how I was raised, seems to be totally different here. My brother borrowed too much (dad bailed him out), never did we blame banks or loan institutes only my brother for getting in over his head. Its just how I am raised, just like when you use a service you pay for it as a business owner i see far too many people defaulting on debt and not paying invoices for services rendered. 

 

People always like to shift responsibility so they don't have to pay, maybe because i see it happen a lot and i see businesses get in trouble by people not paying up what is owned I am a bit jaded in how I look at things. 

This is definitely the other side of the coin, but I wouldn't want to characterise all debtors as the same; many perhaps most Thais are having to perform the same juggling act in order to make ends meet.  Yes, this might also have something to do with overly high expectations- though that in part is also sorely encouraged by large organisations that ought to know better.  Teaching is a low paid job, particularly at entry level.  Like many, if I couldn't afford something new, I did without; you do question peoples' backbone these days.  But this isn't the whole story.  Young people in particular find the pull of peer pressure irresistible.  To marry, one often has to make pledges that frankly are not achievable, yet who wants a single life forever?

 

What is undoubtedly true is that salaries are failing to keep pace with the cost of living.  Moreover, wealth inequality continues to widen.