Teacher debt crisis: Three quarters owe 1.1 trillion baht - on average 3 million each

[ICELANDMAN]

40 minutes ago, RichardColeman said:

Bit offended my that. My wife is/was a teacher. Studied for ages. took out loans for studying. When she worked she paid back the loans, bought 4 plots of land, planted loads of vegetables and rubber and built a house, etc.

 

It's society in general , not just teachers.

The article says that 20% of teachers have no debt, the problem remains mainly with teachers

 

 

[BestB]

15 hours ago, Enoon said:

 

It would be interesting to compare their debt statistics with those who earn similar amounts.

 

That might tell us if it was something "special" about teachers that causes them, even with 6% interest generating savings schemes, to get so heavily into debt.

 

My biased opinion is that they are exceptionally average, but believe themselves to be above average, blowing their earnings in order to display the material lifestyle of higher achievers, with higher salaries.

Teachers on 15000 per month salary are able to take out big loans at low rates wheee as someone with same salary in a different job unable to take out any loans besides buying a scooter with finance and maybe lucky enough to get a credit card with small limit if no other debts . 
 

 

[rabas]

14 hours ago, Chazar said:

what the hell  for? ok Im going out to  borrow  <deleted>loads of money and after will they set up a committee  for me too?

You already have one. It's called the Thai Immigration department who examines your disposable income when you apply for your visa extension. Maybe the teachers need something like that?

 

[ParkerN]

20 minutes ago, ICELANDMAN said:

This make not teaching well on official work and the family children have to buy overtime same teacher, university only delivering toilet paper, what go more wrong ?

 

Lots more can go wrong. Getting things wrong is one of the few things that Thais do really well.

 

Wait and see, all will become clear. Mad Uncle Too can't get thrown out before he makes an epic dog's breakfast of it all. Long way to go yet.

[ParkerN]

22 minutes ago, ICELANDMAN said:

The article says that 20% of teachers have no debt, the problem remains mainly with teachers

 

 

Respectfully, I can't agree. After multiple years of living in Thailand, it is my firm conviction that the problem lies with the Thai culture. Thais are taught how to do things, and the culture of any place is just a reflection of how things get done in that place. If Thais are only ever taught how to get things wrong and make a dogs breakfast of things, or alternatively how to do things according to their best judgement without the proper education or training, no reasonable person can blame them for getting things wrong and making a dog's breakfast of things.

 

 

My POV. I can be wrong too, though I don't think I am.

 

[Pravda]

14 hours ago, bangkokfrog said:

The scary thing for me is that these are the ones charged with teaching our children essential life skills.

 

So who's really dumb here? A Thai teacher or expat who chooses to have their kid in a Thai school while this same kid is sucking on 200+++ quality AQI daily. 

 

At least the so smart expat like yourself had the privilege of western education and should not be in Thailand endangering his family on daily basis and receiving stupid education. 

 

Right? 

[ThomasThBKK]

3 hours ago, No1 said:

You must have studied in Thailand. I would even think you are at a level that you should teach.

 

Sure, let us know how you get an insecured loan from A BANK for free spending at a 25 year multiple of your earnings. I'll wait.

 

 

13 hours ago, Roy Baht said:

No but I know because I live here (in Thailand). It's not housing loans. It's borrowed cash.

 

Then it would not be in this statistics!! They don't have any data on loan sharks, obviously.

You can't borrow cash from a bank in that amount for a personal loan without giving them any collateral.

 

While the rest of the country has to use loan sharks with horrible rates, teachers can easily get a decent mortgage from a bank, mainly the government savings bank, at a low rate, and as it's stupid not to use leverage to buy real estate that's the correct thing to do. But yeah those teachers are the problem that have secured government jobs, and not  somchai the farmer who owes millions for a new SUV to somchai the loan shark at a rate of 17% monthly which adds up to thousands of percent per year....

 

Purchasing RE with cash doesn't make sense, Cash on cash returns is what counts i.e. The return on the money you invested.

 

If you buy a property for 100k USD and rent it out for  700 a month, paid in cash it looks like this: 

700x12/100000 = 0.084 = 8,4%

 

If you do the same purchase with a mortgage and a 20k downpayment which is the usual loan to value ratio for thailand, you use 530 of the rental income to pay off mortgage and other expenses and u have 270 usd cashflow left: 

270x12/20000 = 0.162 = 16.2% 

 

 

Thailand isn't anywhere special when it comes to household debt to gdp: https://www.imf.org/external/datamapper/HH_LS@GDD/CAN/GBR/USA/DEU/JPN/THA

 

 

[Pravda]

Does this statistic include mortgages and what would be a percentage? In the west it's clearly spelled out. Here is a guessing game. 

[alien365]

17 hours ago, saengd said:

Cheap loans is one of the known perks of the job, same with many government type jobs, low pay, decent perks - teachers credit unions typically pay 6% interest on savings, another perk. 

They are now limiting the amount that people can invest into this scheme. It's now a maximum of 5k per month  Before I knew people putting in 30k per month. 

[alien365]

I remember when I was buying my car about 6 years ago and the people in my wife's faculty were saying we needed to buy a more expensive car because she was a teacher. I bought what I thought made the most sense for our circumstances but I could tell my wife felt the pressure from others to overspend. 

[topt]

8 minutes ago, alien365 said:

I remember when I was buying my car about 6 years ago and the people in my wife's faculty were saying we needed to buy a more expensive car because she was a teacher. I bought what I thought made the most sense for our circumstances but I could tell my wife felt the pressure from others to overspend. 

Not unique to Thailand apart from perhaps the peer pressure and thanks for sharing the experience. 

In the UK it used to be called "keeping up with the Jones's"  

[Ventenio]

Car 1,000,000

House 2,000,000.

 

Possible, but probably very few own a house.  

 

So car 1,000,000, Phone 40,000, School Loans, 100,000, Family got 1,000,000 and buying <deleted> from Lazada....860,000

[mickymouse1]

18 hours ago, seajae said:

This shows just how bad/stupid teachers are in Thailand, they are not capable of rational thinking and as several thais think that you dont really have to repay loans if you dont want to.  Teachers are meant to be smart but not here, they keep borrowing because they have a govt job and think they will be taken care of, maybe all teachers need to be taught basic economics, those approving the loans are just as bad, in any other country they would look at what you earn and have to pay out each time they are paid instead of just saying yes but in reality it is the teachers fault for wanting to live above their means. Time for the govt to stop bailing them out and have creditors seize personal property so that they learn they cannot just keep borrowing, we have had a few teachers over the years try to get us to loan them money but we refuse point blank because we know they will never pay it back, the lenders need to do the same thing or wear the defaulted loans

I don't think all Teachers are as stupid as you claimed. Low salaries and high cost of living drove some but indeed not all to borrow. 

[ParkerN]

18 hours ago, Samuel Smith said:

And back in UK. most households are in debt far more than 3 million baht.  It's called having a 25 year mortgage to buy a house.  No mention in OP as to nature of the debt.

Not necessarily so. In the UK, your indebtedness is your outstanding debt less your equity in the property. Now I don't know, but I strongly suspect that no such accounting trickery has been made for the example at hand, though having said that, and having seen quite a lot of Thai homes and the way Thais look after them, I doubt that many of the teachers have a huge amount of equity to play with anyway.

 

Edited January 19, 2020 by ParkerN

[hotchilli]

18 hours ago, rooster59 said:

He said that 400,000 teachers - 80% of the teachers in the land - are now in debt at an average of 3 million baht each.

Living well beyond their means just because of status.. these are supposed to be professional people?

The mark of a newly appointed teacher after graduation is to go out immediately and buy a "Red plated car" just to show everyone  "you've arrived" !

What role model are they to the children?

[ParkerN]

18 hours ago, Elkski said:

Basically the only way they will ever be free from these loans is when they die.  But even then I'm not sure what happens to the car the house the land. Just imagine, the profit was made on this much money

I think the outstanding asset is repossessed and if there is any equity left, the repossessing organisation just keeps it as profit.

 

This is a most peculiar country, and small things like honesty, a lack of duplicity, and a sense of responsibility towards an unfortunate person simply do not exist. The only things that are important here are money, money and money in that order; this is a pretty depressing perspective on Thai life but it does seem consistent with all the observable facts.

 

I suppose it's a feature of the growth curve of primitive people that they have to go through a period of time during which they are comprehensively shafted, and generally ripped off at every opportunity. Being a member of the elites appears to bring certain advantages in this respect, which I guess is why they're so keen to remain elites.

 

Edited January 19, 2020 by ParkerN

[toenail]

18 hours ago, seajae said:

This shows just how bad/stupid teachers are in Thailand, they are not capable of rational thinking and as several thais think that you dont really have to repay loans if you dont want to.  Teachers are meant to be smart but not here, they keep borrowing because they have a govt job and think they will be taken care of, maybe all teachers need to be taught basic economics, those approving the loans are just as bad, in any other country they would look at what you earn and have to pay out each time they are paid instead of just saying yes but in reality it is the teachers fault for wanting to live above their means. Time for the govt to stop bailing them out and have creditors seize personal property so that they learn they cannot just keep borrowing, we have had a few teachers over the years try to get us to loan them money but we refuse point blank because we know they will never pay it back, the lenders need to do the same thing or wear the defaulted loans

Do I detect a grudge against teachers? Most Thais new to using credit will over due the situation because not enough emphasis is placed on penalties of “borrowing money “. 

[manhood]

And these teachers are teaching children at school. What can a child learn from them as they aren't able to manage their daily life!

[Burma Bill]

18 hours ago, Samuel Smith said:

And back in UK. most households are in debt far more than 3 million baht.  It's called having a 25 year mortgage to buy a house.  No mention in OP as to nature of the debt.

Possibly one nature of the debt is an expensive "flashy" saloon car "for show" and then struggle to repay the loan from their basic teacher's salary. Many teachers like this here in rural Issan.

[Mbaki]

This same story comes up every year nothing has changed ????

[poohy]

4 hours ago, glennb6 said:

More recently she bough a new mcy for her mom and family upcountry... 3000b for 24 mths = 72k thb. That is from what I read on the internet, about 2x the cash purchase price. I asked her how much the mcy cost and she said 3000 a month. No, if you just bought it outright, how much?..... silence.   Say no more.

 

 

I would say if you asked about 90% of Thais how much a motorbike or car cost they would only know the monthly figure

 

Personal experience

Me a Mrs bought motorbike about 5 years ago Honda was "so so nice and kind" until they found out we were paying cash

Then the hate was palpable ..no commission less profit they nearly choked when we asked for a discount for paying cash

[SunsetT]

20 hours ago, ParkerN said:

 

I'm not sure about the rational thinking thing, but Thais in general aren't much good with debt, they will buy anything they want in order to appear or feelrich/powerful/important/whatever, and if they don't have the money, they'll borrow it. Not having image/face/barami is tragic for a Thai, the Thai culture strikes again. The amart here literally throw money at the serfs, knowing that the government will bail them out if push come to shove.

 

It's a real problem, and a good lesson would be for several amart to be bankrupted instead of bailed out by their mates in government. It won't happen of course, not while mad Uncle Too has so many good friends to whom he is beholden for his rise to power and to whom he owes money or favours. After all, he's done pretty well out of the coup skylark... so payback is only fair really. Quid pro quo.

And dont forget the  onslaught of Western Capitalist Consumer Culture deliberately designed through advertising to make a previously simple smiling mostly contented people discontented in wanting all the stuff we have but do not need just to keep up with the Jones's. They havent a hope in hell on the peanuts they earn! Not to mention that it is the antithesis of Buddhism and that it is destroying the environment Worldwide.

[SunsetT]

Education, education, education, or, so ironically here, the lack of it.

[Number 6]

Most of these responses are absolutely assinine. You act like they have borrowed the money and <deleted> it all away in a gambling den.

 

I'm certain the bulk of it is on their homes. Many will have a car. Some of it might have gone for education.

 

Teachers get good pensions so long after 60 they can still pay down their debts.

 

CTFO

[Chazar]

19 hours ago, ThomasThBKK said:

money is so cheap these days

"These  days"  but there are  other days and when/if  rates  rise it  will be funny

[ChaiyaTH]

I wonder if this includes their houses as many teachers have like 500K to 1M in education debt alone already, similar amount for car and credit cards too. 
That would leave them with a 1M house only while the avg. cost is higher.

To not forget, many sold land they owned for cash before getting in debts too, so they lost more in total. Struggle must be real.
Plus interest adding up to the current figures over the next decades / informal loans on the dark side with sharks not known either.

Edit: Also wonder if it includes their partners debts, who might not be a teacher.

The comparison made to people in Europe having a mortgage here is quite silly, the house holds value and can be sold, so the actual debt is very small.
Here you often get difficulty selling it as it was over priced initially. To not forget the income is much higher, interest lower.
In terms of private loans, very hard, most people can't even get 5000 euro credit. Here it is super easy (similar to the USA with credit cards).

Edited January 19, 2020 by ChaiyaTH

[new2here]

I’m not so sure I place a whole lot of “blame” on the financial institutions themselves...  so long as they properly disclosed the terms of their loans/products in advance, then I can’t really place a whole lot of blame on them.

 

yes, there is the idea of predatory lending, excessive interest rates and such.. but... from a base line idea, I hold that an adult is principally responsible for their own income/debt situations.

 

yes, cheap or easy credit does have risks ... I agree.. but in the end, cheap/easy credit is really only problematic for those who essentially mismanage it. 

 

What I guess surprises me a bit is that there isn’t better financial management taught in schools or even with the new government teachers before they are deployed into their respective schools.  I would have hoped that the civil service unit would have classes for their new members to teach them about their new reality... be that money management, retirement planning, any public sector benefits available, etc.

 

i get it that the initial salary is low (low is of course relative) but it IS (as I know it) fully disclosed to prospective teachers in advance.. so.. they did know this is the income stream they’d be locked into going forward.

 

to that end, I don’t really think it’s the banks nor governments “duty” to ”bail out” these folks.... now, from a national fiscal health perspective, having such a large percentage of debt held by one single class of creditor is worrysome from a potential default risk basis — I DO think the government must keep tabs on it- but I’m not a supporter of direct fiscal intervention in the matter at this point in time.

Edited January 19, 2020 by new2here

[topt]

54 minutes ago, new2here said:

What I guess surprises me a bit is that there isn’t better financial management taught in schools or even with the new government teachers before they are deployed into their respective schools.

Does this actually happen where you come from as it certainly never used to happen n the UK and I doubt that has changed much? 

[bangkokfrog]

5 hours ago, Pravda said:

 

So who's really dumb here? A Thai teacher or expat who chooses to have their kid in a Thai school while this same kid is sucking on 200+++ quality AQI daily. 

 

At least the so smart expat like yourself had the privilege of western education and should not be in Thailand endangering his family on daily basis and receiving stupid education. 

 

Right? 

Wrong!  I think you need to change your meds or whatever else it is that gets you on such a high a horse. You have no knowledge of my circumstances and I resent your sick implications that I am endangering my family.

 

Like most expats, I am quite capable of ensuring that my daughter is not affected by these shortcomings in the Thai education system. The word "our" in my post is reflective of my feeling of inclusiveness in my school community and being sorry for those parents who can't do this. Take another drink/pill and calm down.

[justin case]

22 hours ago, saengd said:

teachers credit unions typically pay 6% interest on savings, another perk. 

seriously ?

 

I could earn big bucks with 6% interest on savings

 

I could almost live like most TV rich pensioners here

 

but no, my bank gives many times less, lol

 

anybody has great investment tips for 10 MIL?