Student loan takers cite low income and misunderstanding in failure to repay loan

BANGKOK, 2 July 2014 (NNT) – The Education Council has discovered from research that students who failed to pay back the Education Loan Fund either claimed they did not earn enough income or they were of the understanding that the loan did not have to be repaid.

According to Associate Professor Chawani Thongrot, the deputy secretary-general of the Education Council, a recent study in Khonkaen provincen indicated that nearly 128,000 borrowers have yet to pay back their loans.

Most of the borrowers either claimed they earned insufficient income or misunderstood that they did not have to pay back the loans.

To solve the problem, Dr. Chawanithere said, there must be more public relations activities that reach the borrowers. The criteria for minimum income warranting repayment of the loan of the borrowers should also be adjusted to 15,000 baht per month.

Employers should also be asked to deduct the monthly repayment amount from the borrowers' paychecks and pay the deducted amounts directly to the fund.


-- NNT 2014-07-02

"We share"

Did the research questionnaire include the words "All answers must be truthful"?

or they were of the understanding that the loan did not have to be repaid.

I would suggest this is the typical of the average student leaving university - understanding nothing

No pity for lenders.

Anyone know what the repayment terms are on these loans...especially in default?

From what I can make out the paperwork can be VERY confusing. My wife is paying hers. But yearly lump sum not monthly. It would seem the first 5 years or so are low but ramp up as the loan term progression. I might ask her more tonight.

Lender is a government revolving fund.

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"The Education Council has discovered from research that students who failed to pay back the Education Loan Fund either claimed they did not earn enough income or they were of the understanding that the loan did not have to be repaid."

Obviously the money was wasted if it was spent on basic economics and math classes, not to mention elementary reading skills which would have been useful while researching the requirements of the loan agreement before they signed.

Then again, they might have been made aware in their Thai Ethics Class that they could deny any knowledge of needing repay the loan.

BANGKOK, 2 July 2014 (NNT) – The Education Council has discovered from research that students who failed to pay back the Education Loan Fund either claimed they did not earn enough income or they were of the understanding that the loan did not have to be repaid.

Unfortunately, I expect many of the students had these two excuses in mind even before getting the education loan.

Misunderstood that they don't have to back the loan.... Hey, I want to misunderstand

my housing loan I got from my bank.... can I?

Education Council identifies causes of student loan defaults



BANGKOK: -- The Office of the Education Council (OEC) says student loan default was caused by insufficient earnings, misunderstanding and misinformation.

It also said a total of 128,000 borrowers of the government’s low-interest student loan scheme are still defaulting on the student loan and are currently facing court proceedings.

This was revealed by OEC deputy secretary-general associate professor Chawani Thongrot at a press conference Tuesday to report on the progress of the student loan scheme and its mediation effort to ease the court proceedings against graduates who defaulted on the loan.

She said the survey was conducted in Khon Kaen province from a total of 4,184 burrowers of the loan scheme.

Khon Kaen was picked for survey because it is the province where there are the highest number of burrowers of the loan scheme. Besides it also has many state and private universities.

Of the 4,184 samples, 3,566 are still studying in universities, 625 have graduated and 62 are university executives.

Most of the borrowers addressed financial problem for their failures to pay back the loans. They said they have insufficient earnings.

Besides, they said they were misled and misinformed by senior students from generation to generation that they needn’t have to pay back, while others said they chose to pay for loans that carry high interest first.

With such finding of the research, she said there must be more public relations campaign to educate students to understand the loan scheme, and its objectives.

She then said the criteria for minimum income warranting repayment of the loan of the borrowers should also be adjusted to 15,000 baht per month.

Besides, employers should also be asked to deduct the monthly repayment amount from the borrowers’ monthly payroll and pay the deducted amounts directly to the fund.

Under the student loan conditions, borrowers must pay back their loans within two years of graduation or face court proceedings.

The Loan for Education Fund has provided loans valued at over 357 billion baht to 3.7 million low-income students since it was established in 1996.

Student loan defaults are a reflection of serious structural problems in the higher education system, which does not prepare students well for a changing world of work, one detractor argued, one researcher has said earlier.

Source: http://englishnews.thaipbs.or.th/education-council-identifies-causes-student-loan-defaults/


-- Thai PBS 2014-07-02

Thainess ?

I took a loan, didn't know I had to repay.

How long does a Thai loan last for ? Forever !

From what I can make out the paperwork can be VERY confusing. My wife is paying hers. But yearly lump sum not monthly. It would seem the first 5 years or so are low but ramp up as the loan term progression. I might ask her more tonight.

Lender is a government revolving fund.

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

That is sensible - as the person gets older their salary increases so they can afford more to repay

The old i didnt know excuse, no one is that stupid to think it was free money.It seems very common in this country borrow actually mean gift.

Wait a minute...

So let me get this straight, are you trying to say that loans have to be repaid?!

"MAI COW JAI!!!" Not reasonable, why loans have to be paid. I was told, I sign the document, I can have money to buy iphone...

Something is just not right, hold on, let me get my lawyer. Actually I don't have one, do they provide free lawyers?!

Low income bit cant be right.

All those with a degree were promised a starting salary of 15,000 a month.

Could it be that some took out a loan on the understanding that they would get that, therefor being able to repay the loan.

"The Education Council has discovered from research that students who failed to pay back the Education Loan Fund either claimed they did not earn enough income or they were of the understanding that the loan did not have to be repaid."

Obviously the money was wasted if it was spent on basic economics and math classes, not to mention elementary reading skills which would have been useful while researching the requirements of the loan agreement before they signed.

Then again, they might have been made aware in their Thai Ethics Class that they could deny any knowledge of needing repay the loan.

Kind of reflects back on the lender also. I mean how hard would it be to say you have to repay it. They could easily have said that when making the loan.

The payment system can be complicated but that is not a reason for a college graduate to not repay it if he was point blank told he had to pay it.

These are the teachers of the future the colleges are turning out. No help for tomorrows students from them.

Need new professors.

This is a golden opportunity for the Education Council: just bundle all these bad loans and sell them to some investment banks, they pay handsomely for this stuff!

Did the research questionnaire include the words "All answers must be truthful"?

More importantly was there a box to tick

Paying a loan back seems to be missing in many Thai peoples' way of being. Some things "Thai" I will never understand.

So most of the student borrowers did not understand that the loans have to be repaid. Good grief!

Looks like this education reform can't come quickly enough.

Actually for those familiar with this scheme, it is not surprising that many students hoped it would not have to be repaid. It was sold to them by the government as a "free university education". The interest rates were so low that the longer they waited to repay, the less they would owe as the rates were under inflation.

Like many stories in the news here, you need to look behind the headlines to get the real story.

It was a scheme already in operation that really got ramped up 15 years ago. It allowed politicians in the education industry to receive huge amounts of income by pushing more M.6 students from the rural areas into cheap, private universities. Tuition fees were paid direct to the universities.

It allowed local politicians to be bought by the above bigger politicians. The big ones would go into an amphoe in e.g. Kalasin and say, "Give me 1200 M.6 kids and I'll give them a free degree." Massive building of patronage networks and lots of activity in the favour banks.

It gave 1000's of students a piece of paper that said Bachelor's degree allowing them to apply for jobs they would not have been able to apply for otherwise. No discussion was made about repayment. But I am sure there was something in the contract they signed. Certainly the impression was that repayment could be postponed indefinitely.

Actually for those familiar with this scheme, it is not surprising that many students hoped it would not have to be repaid. It was sold to them by the government as a "free university education". The interest rates were so low that the longer they waited to repay, the less they would owe as the rates were under inflation.

Like many stories in the news here, you need to look behind the headlines to get the real story.

It was a scheme already in operation that really got ramped up 15 years ago. It allowed politicians in the education industry to receive huge amounts of income by pushing more M.6 students from the rural areas into cheap, private universities. Tuition fees were paid direct to the universities.

It allowed local politicians to be bought by the above bigger politicians. The big ones would go into an amphoe in e.g. Kalasin and say, "Give me 1200 M.6 kids and I'll give them a free degree." Massive building of patronage networks and lots of activity in the favour banks.

It gave 1000's of students a piece of paper that said Bachelor's degree allowing them to apply for jobs they would not have been able to apply for otherwise. No discussion was made about repayment. But I am sure there was something in the contract they signed. Certainly the impression was that repayment could be postponed indefinitely.

Your information is entirely credible. It is also rather depressing...

If the loan is from a loan shark there is no misunderstanding and it will be repaid (or else!!); if the loan is from the govt "I didn't understand I was suppose to pay it back...I don't have enough income to repay."

Wife tells me the higher educated one is in Thailand the harder it is to find employment. Why? Companies dont want to pay. Alot of employers look for diploma holders so they dont have to pay the minimum graduate salary. 15000 a month i think it is.

they shoulld hire some loansharks and explain how it works when you don't pay back your loan on time ?

555

hey, a got a loan, but I tought it was a gift ???????????????

The old i didnt know excuse, no one is that stupid to think it was free money.It seems very common in this country borrow actually mean gift.

So true.... or did you ever get any money back [edited] that you borrowed to a thai?!

If you have a hole in your pocket -

It is better to spend the money - or you will lose it!

or they were of the understanding that the loan did not have to be repaid.

I would suggest this is the typical of the average student leaving university - understanding nothing

Do they understand what the word LOAN actually means?

If these students really don't understand that a loan must be repaid, then they, their parents, and the government need to question just what kind of education they received with the money that they borrowed

Misunderstood that they don't have to back the loan.... Hey, I want to misunderstand

my housing loan I got from my bank.... can I

Yea you can ,,,,,but watch out for the Repo Man,,,,,,,Don't they understand a LOAN is a LOAN,,,NOT a GIFT!!!