Thai govt 'must urgently tackle teacher debt crisis'

[webfact]

Govt 'must urgently tackle teacher debt crisis'

By CHULARAT SAENGPASSA 
THE NATION 

 

Somkid Homnet

 

RESTRUCTURE LOAN REPAYMENTS OR FACE ‘AWFUL DOMINO EFFECT’, SAYS DEBTOR CENTRE OFFICIAL

 

MORE THAN 1.5 million serving and retired government teachers and other educational personnel collectively owe Bt1 trillion to institutional moneylenders. Their appeals for help in repaying their debts cannot simply be ignored, officials warn. 

 

“If these teachers are unable to repay, not only will the teacher savings cooperatives falter but also banks,” Debtor Centre secretary-general Kanlayanee Ruttarakarn told reporters earlier this month. “In that case, we may see an awful domino effect.” 

 

She made the comment after a group of teachers issued a “Maha Sarakham Declaration” urging the Government Savings Bank (GSB) to offer easier repayment terms on loans from the Funeral Help for Teachers/Educational Personnel from Friends. 

 

They threatened to encourage more than 400,000 other educators owing the fund money to halt their repayments. 

 

The declaration drew condemnation, with critics saying teachers should be good role models for children and not be threatening to renege on debts. 

 

But Somkid Homnet, head of the People’s Sector Network against Corruption, pointed out that the teachers did not want to default or intend to default. “They just want to communicate to the government the need to address their debt crisis in a proper way,” he said. 

 

Launched in 2004, the Funeral Help for Teachers/Educational Personnel from Friends project has been both popular and reviled. 

 

Loans have been approved over the course of seven phases, the first four generally problem-free because they dealt with loans of no more than Bt200,000 per applicant. 

 

But the maximum loan amount has kept rising – Bt600,000 in Phase 5, Bt1.2 million in Phase 6 and Bt3 million in Phase 7. 

 

“I want to call this a corrupt policy,” Somkid said, noting that some 485,000 teachers had been attracted by the amounts on offer, relatively low interest rates and attractive repayment terms. 

 

 

If unable to clear their debts in one single payment, recipients need pay only the interest until they die, after which their outstanding debt is cleared with money from a funeral fund to which all members are required to contribute Bt1, or by applying their own life insurance death benefits. 

 

“But when the loan amounts are so high, the teachers find they don’t have enough money after interest charges to cover their living expenses,” Somkid said. 

 

He said the GSB, Office of Welfare Promotion Commission for Teachers and Educational Personnel, and Dhipaya Insurance Public Co Ltd were in charge of implementing Phases 5 to 7. 

 

Welfare Promotion Commission acting secretary-general Pinichsak Suwannarung said teachers must buy life insurance to ensure their debts would be repaid after they die. 

 

“And the premium over nine years is between Bt34,000 and Bt187,000, depending on the loan amount, which can range from Bt600,000 to Bt3 million,” he said. 

 

If the applicant teachers have guarantors, though, there’s no need to purchase life insurance. 

 

Uaychai Wata, president of the Teacher Profession Organisation Network of Thailand, said the government should reconsider its policy of requiring this insurance coverage when issuing loans. 

 

He asked if there were some “irregularity” involved in having a private firm participating in the loan process. 

 

He suggested that the government should treat the issue of teachers’ mounting debts as a national priority and pursue proper debt restructuring. 

 

What it urgently needed is a one-year debt moratorium for the 4,000 teachers currently ensnared in a debt crisis, Uaychai said. 

 

Instead, the GSB wants to sue the 4,000 teachers, who it says have poor repayment records with the Funeral Help loan scheme.

 

“I will meet with the GSB early next month,” Uaychai said. “I hope it will consider a one-year debt moratorium.”

 

Pinichsak Suwannarung

 

Pinichsak said his office would try to contact the 4,000 teachers to explore solutions acceptable to both sides. In most cases, he said, the debts were slightly more than Bt1 million, though some owed up to Bt3 million. 

 

The GSB pays his office a management fee to help implement the loan project, equivalent to between 0.5 and 1 per cent of the total loan amount. 

 

“We have spent about Bt10 billion from that management fee to settle some of the default cases,” Pinichsak said. 

 

“We have another Bt10 billion left and will use that to ease the interest burden on teachers who have good repayment records.”

 

About 480,000 teachers owed money to the Funeral Help for Teachers project, he said, of whom more than 370,000 had good repayment records. “So I must say that the majority of teachers do not intend to default, and they have good financial discipline,” hesaid. 

 

Source: http://www.nationmultimedia.com/detail/national/30351025

 

-- © Copyright The Nation 2018-07-30

[webfact]

Indebted lives

By The Nation

 

Kanokpij

 

During the past seven years, every single baht from retired teacher Somjit na Soongnoen’s monthly pension of more than Bt30,000 has gone towards repayment of debt.

 

“I owed Bt1.2 million to the Nakhon Ratchasima Teacher Savings Cooperative and Bt1.5 million to the Funeral Help for Teachers/Educational Personnel from Friends loan project,” the retiree disclosed. 

 

He initially did not expect the funeral help loan project to become a big burden because at the time he applied for assistance, the interest rate was only 3 per cent per annum.

 

“But now the interest rate has increased to 8 per cent,” he complained.

 

So even after retiring as a teacher, Somjit finds himself compelled to work to cover his living expenses. He now runs a small grocery shop and also doubles up as a stationery dealer. 

 

Kanokpij Thanyakij, a 45-year-old teacher, said she needed to earn more than Bt60,000 a month to repay not just her own but also her parents’ debts on top of living expenses. 

 

“My salary is Bt45,000 a month only. So, I’m now doing some farming for extra income and also preparing my own lunch so that I don’t have to buy any,” she said. 

 

Source: http://www.nationmultimedia.com/detail/national/30351028

 

-- © Copyright The Nation 2018-07-30

[kannot]

3 minutes ago, webfact said:

“They just want to communicate to the government the need to address their debt crisis in a proper way,”

Anything but accept its  their responsibility then............tossers!!

[kannot]

6 minutes ago, webfact said:

“My salary is Bt45,000 a month only. So, I’m now doing some farming for extra income and also preparing my own lunch so that I don’t have to buy any,” she said.

yes  love, and even if your salary was 145000 a  month you'd  STILL be in debt wouldnt you.

Must be "such" a  trial having to make youre own lunch eh.............Ive really got NO sympathy for these pathetic  losers.

45k eh so much for the "im only getting 8k a  month as a teacher"

Edited July 29, 2018 by kannot

[kannot]

4 minutes ago, webfact said:

Bt1.5 million to the Funeral

let me  guess, instead of a very cheap funeral at the temple  there was a  great big "ferk  off ,big face "  party with dancing girls and a massive sound stage, i mean what were u cremating ??? an entire  football team????

[kannot]

9 minutes ago, webfact said:

During the past seven years, every single baht from retired teacher Somjit na Soongnoen’s monthly pension of more than Bt30,000 has gone towards repayment of debt.

yes 30k, oh  no  poor  poor  poor  poor  teachers earning a pittance, you truly  show unbelievable STUPIDITY................... hope you werent teaching maths!!

[cornishcarlos]

26 minutes ago, webfact said:

teachers had been attracted by the amounts on offer, relatively low interest rates and attractive repayment terms

 

So where is the problem ?? They liked the deal and went for it...

 

29 minutes ago, webfact said:

 

If the applicant teachers have guarantors, though, there’s no need to purchase life insurance. 

 

Better hope the applicant and the guarantor are not in the same car accident, loan would then go unpaid !!

 

 

[Chang_paarp]

So assessing the ability of the loan applicant to repay the loan was not part of the process?

 

[humbug]

there was a better article on Sunday from another 'paper'

 

1.2 trillion in debts 

450 billion baht to Government Savings Bank

800 billion baht to Co-op funds

thats 3 million baht per teacher in debt 

 

scheme was a way around normal 'loan' procedure ie no 'credit checks' etc just had to be a 'member of funeral fund' which was free to join

 

then the Government Savings Bank and Co-o funds ' had' to loan and offer up to 3 million over 30 years

 

i would bet this practice using weird names to be members to get around normal 'loan' practices has been going on for decades for all civil servants. Just that the teachers were among the poorest and more liable for bad debts.

 

its nothing more than bribery to keep civil servants onside and back the 'status quo' ie junta/yellow shirts

 

the Government Savings Bank is not a normal bank listed on the Stock Exchange. It can easily be pillaged by the junta/yellow over decades of this crew being mostly in power

 

a more recent example of pillaging a bank was 10 years ago the Thai military bank which had to be bailed out with investment from an overseas bank and taxpayers money. No surprises for whom was to blame for that mess. 

[dotpoom]

2 hours ago, webfact said:

If unable to clear their debts in one single payment, recipients need pay only the interest until they die, after which their outstanding debt is cleared with money from a funeral fund to which all members are required to contribute Bt1, or by applying their own life insurance death benefits. 

Not a bad deal ... For sure?

[Bob12345]

2 hours ago, webfact said:

“If these teachers are unable to repay, not only will the teacher savings cooperatives falter but also banks,” Debtor Centre secretary-general Kanlayanee Ruttarakarn told reporters earlier this month. “In that case, we may see an awful domino effect.” 

SOunds horrible, but it requires 1.5 million people to not repay their debts.

Whats the chance of that?

 

And what if all people in Thailand are unable to repay their debts?

The consequences will be much worse... so maybe we should forgive everybody's debt?

[aircooledflat4]

^^ yeah but what if they default on the funeral fund? 

[quandow]

Perhaps if critical thinking was taught in Thai schools n the FIRST place, they wouldn't be in this situation.

[BuaBS]

Confiscate all their property : cars , houses , land , ...

[JoeW]

and still many of the teachers at my school are driving Fortuners, Everests and Camrys...

[colinneil]

4 minutes ago, BuaBS said:

Confiscate all their property : cars , houses , land , ...

So you advocate making thousands of children homeless?

The banks need to stop lending money to people who have not enough income to pay back.

[Oziex1]

Part of the problem is the great reverance they are treated with, we are the wise ones, we can do no wrong. So now they find they are only human after all.

[OmarZaid]

loan institutions and banks are at fault for perpetuating the usurious ruin these scoundrels double their capital every seven years -- compound interest and fractional banking are the real problem folks

[FLHR]

I'm an anti loan/interest guy all the way. Only borrowed for homes & than would double payments to nail the interest.

Here, unfortunately, the people are under-educated & kept that way. Civil servants are huge targets for predatory lenders with their guaranteed paychecks & near impossible bankruptcy options. Many have family that will beg to take out loans for them when they get a government job. They get unsolicited predators at work, mailings & calls day & night for varieties of loan & insurance schemes. Even when they're already up to their eyebrows in impossible debt.

They've been groomed for their irresponsible actions and the groomers are doing phenomenally/criminally well.

[mikebell]

This problem is not confined to teachers; in Thailand many walks of life borrow but default.  Another stat - 92% of traffic fines go unpaid.

[TheFishman1]

Unbelievable the Teachers Borrower Money now they don’t want to pay the loans back must be a Thai thing You think with the education system here and they being Teachers shows a good example of Thai Culture Sad but true Not my fault I borrow money and now can’t pay it back TIT

[utalkin2me]

I think everyone should just stop paying their debts. ---- em. That is why you pay the points anyway, because there is a chance, which they are aware of, that they wont get paid. These are the modern day slave holders. And in thr US, the slave holders were the ones who, inexplicably, got bailed out by the slaves. 

 

And what would happen if everyone listened to me and the credit card companies went bankrupt? We would use cash. Oh what a travesty, boo-fing hoo. 

[leoibh]

House of cards

[AlQaholic]

Not sure why teachers have to borrow money, but I remember reading somewhere, Thai teachers carry great respect in the local communities and are expected to help out in the community with money they don't have and thus accumulate debt, not by their own spending but helping out the community and community members with various expenditures? Maybe also spending their own (borrowed) money on school-related stuff?

Edited July 30, 2018 by AlQaholic

[jacknorman]

3 hours ago, kannot said:

let me  guess, instead of a very cheap funeral at the temple  there was a  great big "ferk  off ,big face "  party with dancing girls and a massive sound stage, i mean what were u cremating ??? an entire  football team????

it's a loan cooperative  it nor mean  payment for a funeral

 

Funeral Help for Teachers/Educational Personnel from Friends loan project

[nahkit]

4 hours ago, kannot said:

let me  guess, instead of a very cheap funeral at the temple  there was a  great big "ferk  off ,big face "  party with dancing girls and a massive sound stage, i mean what were u cremating ??? an entire  football team????

The fund is called the funeral fund because when you die the loan is paid off by the fund, got nothing to do with borrowing money for a big funeral.

[dickjones2018]

who teaches the teachers that you should leave with your means...don't spend more than you earn kinda thing

 

no words anymore of the loan sharks with 10-30 % interest per month

 

I would be happy to get 5-10% per years, but as a farang, not allowed, only to give GIFTS aka loan that will never be paid back

Edited July 30, 2018 by dickjones2018

[Khun Paul]

Try teaching the teachers, or is that so difficult, presumably it is as they seem unable to teach their students, yet edxpect adoration and c heap loans while they screw up their lives as well as the students they are supposed to teach. Financial prudence and planning is never been part of Thai life, always someone else's fault NEVER your OWN.WELCOME TO THE REAL WORLD. !!!!! 

[mommysboy]

I think many of the teachers really have shown a distinct lack of personal financial responsibility, which is indeed of singular concern when one considers their position and role as educators to the young. It does certainly illustrate that you can have all the certificates in the world, yet still be financially rather dumb.  It's a financial naivety that is not confined to teachers, but also extends to many public sector workers in all countries. 

 

However, this does smack of a dodgy scheme, doesn't it? I feel that any fair analysis would also possibly conclude the money lenders, essentially the authorities, have been equally reckless.  Clearly, large amounts of money have been lent to people who can not repay the principle sum, thus placing them in a debt trap.  

 

Being circumspect, many folk like to blame people who are in debt, and they may have a point.  But these people in turn are rather naive if they believe that the benzedrined debt fuelled version of capitalism that has afflicted the world for the past 40 years is anything than a glorified ponzi scheme, where inevitably the majority (and poorest) end up losers.  Rather than face this fundamental truth, certain people- you don't have to look far- would rather believe in the Cane and Abel myth, identifying themselves of course with the heroic element.  The others then are regarded as the reason why systems fail, rather than the rotten system itself.

 

Obviously, this is just my opinion; I don't suppose I need to disclose my political allegiance?.

[mommysboy]

7 minutes ago, Khun Paul said:

Try teaching the teachers, or is that so difficult, presumably it is as they seem unable to teach their students, yet edxpect adoration and c heap loans while they screw up their lives as well as the students they are supposed to teach. Financial prudence and planning is never been part of Thai life, always someone else's fault NEVER your OWN.WELCOME TO THE REAL WORLD. !!!!! 

Nah!