Thai In Debt To Government - Student Loans

[geriatrickid]

Background: Student ran up 350,000 baht of debt to government during time at university. Comes from low income family with no ability to raise the funds. Currently in job which pays 20,000 baht per month. 1/2 goes to family support, 1/2 to monthly living expenses. No lavish lifestyle, no other debt. Debt is 5 years in arrears.

Current: Received strong letter from government saying pay up or face serious consequences. His brothers could not obtain university financing because of his bad debt. Debtor now scared sh*tless and is about to go see a lawyer for advice.

My view: Ok he ran up a big debt which he neglected. He was an idiot etc., but has learnt his lesson. He knows he has to pay off the debt but doesn't have the means to do so. He thinks he'll get tossed in jail and I have said most unlikely since throwing people in jail for a debt defeats the purpose of obtaining repayment, since his working would allow him to pay back.

I would think that if he went to the government agency and said look, I am penniless, I make 20K baht a month and I support my family, can we come to an arrangement, where I make monthly installments or something, otherwise there will always be a bad debt or I will just declare bankruptcy and walk away from this, especially since I have no assets, no motorbike, nothing.

What do people do in a situation like this? I haven't seen this anywhere in the TV threads. I am clueless on the subject of debt since I have never borrowed in my life. Although retaining a lawyer is the first step, my concern is that all this will give is big legal fees with nothing really resolved. In western countries, once can go to the government and come to an agreed settlement. What happens in THailand? Is there a law firm that has experience in dealing with Thai student debt restructuring and if so, is there an office on Phuket or close by.

And please no lectures on the absence of functioning brain cells in the debtor's cranium. I have already ripped a piece off of his hide and together with his friends we will try and get him fixed up. (And no I'm not planning on paying off the debt, since he's not my kid.)

[harrry]

http://unesdoc.unesco.org/images/0013/001336/133624e.pdf

Is a paper relating to student loans in Thailand you may find interesting. I fin it hard to understand 350000 baht as the maximum total loan amount seems to be 100000 but I may be wrong. It will give you some idea of the problems though.

[Macx]

From what I gather, average cost for Ratchapat type university outside BK, including food and living expenses, is around 50k/yr.

8k tuition/term, 2k books/term, so 20k/yr to the school

4k/mo for food and dorm, 8months roughly 32k/yr,

so you're looking at a basic of around 50k/yr

4yrs would take that up to around 200k

Of course, if the student lives in a private apartment, has a motorbike/car, and goes out regularly, the living budget could easily triple.

There are also student loans available to high school students.

No idea about negotiating payment. Good luck.

**I should also add that tuition for some majors are much more expensive

[edit for clarity]

[slapout]

Do not know what the graduate studied at University but not math or economics, me thinks. Undoubtedly independent living was also overlooked. Why would you even propose any avenue of escape to someone who has gone 5 years in arrears on a loan, made no attempt to make any type of provision for payment, now going to see lawyer??? Doubt lawyer will handle case such as this without payment up front, apply that to loan. Was no security was given for loan, land, house, etc??? Sell whatever was used as security and pay on loan. Sounds like another deadbeat and not worth the trouble of getting involved.

[TerryLH]

"He thinks he'll get tossed in jail and I have said most unlikely since throwing people in jail for a debt defeats the purpose of obtaining repayment, since his working would allow him to pay back."

Apparently not in his case.

How many brothers did he screw out of being able to go to school by his selfishness?

[madjbs]

20,000 a month is more than enough to pay the loan back. In the first year you only have to pay something like 3000 baht back. It then goes up every year for 15 years.

[Livinginexile]

20,000 a month is more than enough to pay the loan back. In the first year you only have to pay something like 3000 baht back. It then goes up every year for 15 years.

I agree,

350k sounds a bit high though, my wife says it should be more like 200k. Have you seen the government dept?

He can also negotiate a payment schedule. If he keeps hiding and trying to avoid his obligations then sure, the authorities are going to get tough with him.

[a2396]

20,000 a month is more than enough to pay the loan back. In the first year you only have to pay something like 3000 baht back. It then goes up every year for 15 years.

I agree,

350k sounds a bit high though, my wife says it should be more like 200k. Have you seen the government dept?

He can also negotiate a payment schedule. If he keeps hiding and trying to avoid his obligations then sure, the authorities are going to get tough with him.

Why are you mixed up in this anyway? Most of what I have heard of these loans involve many "can of worms" issues only understood by another Thai or someone very fluent in Thai language. For a Farang to understand all the facets, it would be quite a challenge. Often, part or all of the loan is forgiven, if they are in some eligible cirriculum, such as nursing and will work in their home province for a period of time.

[true blue]

my missus,owes x amount to goverment for uni loan,got same letter went to see goverment solictor pleaded poverty,was told just pay what you can afford each month, and dont miss a payment.

[robblok]

my missus,owes x amount to goverment for uni loan,got same letter went to see goverment solictor pleaded poverty,was told just pay what you can afford each month, and dont miss a payment.

How can she do that she landed a rich farang husband ? I mean that would lift her from poverty or are you guys holding out on the goverment. Hard to find honest ppl recently.

My gf just worked her way through uni never got any debt.

[geriatrickid]

my missus,owes x amount to goverment for uni loan,got same letter went to see goverment solictor pleaded poverty,was told just pay what you can afford each month, and dont miss a payment.

Thank you for the only intelligent non judgemental piece of advice. Helpful too

For those that have never attended a decent university in a city far from their hometown, I doubt you can understand the pressures on students from impoverished backgrounds. The student's program was finance, he lived in Bangkok and went to one of the better (more expensive) universities, because he could get in. I spent almost a decade in the university system and worked too, but I was fortunate to have a father that paid my tuition and gave me support payments as he knew it was a hard slog working and studying at the same time. However, I have plenty of friends that racked up massive student debts.

I don't doubt that 20% of the student debt in question here was attributable to what a kid living on his own at age 19-20 can do. Calling him a deadbeat is more indicative of a respondent's inability to appreciate what it is to be a kid in the big city living on your own and naive. I've never had a debt in my life, but I can understand those that can get into a debt problem.

There is no hidden agenda or can of worms, just the results of being a young and foolish boy without parental supervision. Being an orphan can do that to a person. Trying to lift oneself from poverty without a mentor does that too.

In the interim, I have asked independent legal counsel to report back on personal bankruptcy options. Might be better to start fresh.

[Pakboong]

I know a young lady in the same boat who pays only 1,000 baht a month on a 100,000 baht student loan.

[harrry]

From the table in the paper I sent you he would only have to pay about 800 baht a month for that debt. Bankruptcy seems a bit drastic for that.

Year I 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Repayment 1.5 2.5 3.0 3.5 4.0 4.5 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0

(percentage

of principal)

[madjbs]

On these loans you can't just run up a huge debt by living lavishly, as they are carefully divided up for different things. Students only can claim 2500 baht a month for living expenses for example. The other costs must have come from high tuition fees etc..

20,000 is a decent salary, more than most graduates get for quite a few years. I don't see why he can't save 1000 baht a month to pay the loan back? Also, the loan doesn't have to be paid for 2 years after graduation.

[slapout]

OK mister Kid; Maybe deadbeat is too harsh a term. I also went to University, but without parents help in a monetary sense. They had gone to Uni under similar conditions during the Depression ( farm kids, no money in parents pocket) My children (2) went to uni and I helped daughter(she also worked) and son paid 80% of his education, while working. His reasoning for self inflicted pain was he turned down a full scholarship to a major university, thus, Dad gets a break. (I told him he was thinking out of the box) That is 3 generations who made a effort to get a education without putting a burden on family directly or via the government (family pays tax, thus same same) There were loans available even 50 years ago. How many of the student loans in Thailand go to students whose family pay income tax into the thai system? If deadbeat is too harsh I would still say the boy is attempting to get around a debt which he incurred, by screwing the tax paying citizens of Thailand, call it what you want. As someone mentioned, go into community type work and most governments write off a % of the debt for each year worked. Thailand advertises this to teachers working in remote areas.

[geriatrickid]

OK mister Kid; Maybe deadbeat is too harsh a term. I also went to University, but without parents help in a monetary sense. They had gone to Uni under similar conditions during the Depression ( farm kids, no money in parents pocket) My children (2) went to uni and I helped daughter(she also worked) and son paid 80% of his education, while working. His reasoning for self inflicted pain was he turned down a full scholarship to a major university, thus, Dad gets a break. (I told him he was thinking out of the box) That is 3 generations who made a effort to get a education without putting a burden on family directly or via the government (family pays tax, thus same same) There were loans available even 50 years ago. How many of the student loans in Thailand go to students whose family pay income tax into the thai system? If deadbeat is too harsh I would still say the boy is attempting to get around a debt which he incurred, by screwing the tax paying citizens of Thailand, call it what you want. As someone mentioned, go into community type work and most governments write off a % of the debt for each year worked. Thailand advertises this to teachers working in remote areas.

I can't argue with you, because I understand your point, and worse, i agree with you. All that i am trying to do here is to help someone clean up his own little mess, to do the right thing and get on with life.

one of his other friends has already retained legal counsel, so we'll see what happens now. personally, I'd have smacked him upside the head long ago, but that doesn't help either. He does want to repay, but just doesn't have the means to do so. We're going to look at trying to schedule a debt repayment schedule along with a forgiveness aspect or something. Up to legal counsel now.

[madjbs]

He doesn't have the means to pay a couple thousand baht a year?

Come on!