Thai govt to help ease teachers’ debt problem

[webfact]

Government to help ease teachers’ debt problem

 

 

BANGKOK: -- The Finance and Education ministries have joined force to help ease teachers’ debt problem through refinancing by Government Savings Bank.

 

Finance Minister Apisak Tantiworawong and Education Minister Gen Dapong Rattanasuwan on Wednesday witnessed the signing of a memorandum between the GSB and the Office of the Committee for the Promotion of the Welfare of Teachers and Educators.

 

Under the MOU, GSB will provide loans up to a ceiling of 300,000 baht to each teachers who is already indebted to the GSB. The new loans which are charged 4 percent flat rate and payable in 20 years will be used to refinance the old loans with the bank which charged higher interest rates.

 

Full story: http://englishnews.thaipbs.or.th/government-help-ease-teachers-debt-problem/

 

-- © Copyright Thai PBS 2016-09-15

[shirtless]

Maybe its time they live within their means  but this  is Thailand  and Thais have little self control 

[davehowden]

God forbid they use the money to educate the kids!

[NongKhaiKid]

45 minutes ago, shirtless said:

Maybe its time they live within their means  but this  is Thailand  and Thais have little self control 

How many teachers happily get into debt, extra debt banking on the hope the govt will bail them out, again ?

[Brer Fox]

The government is simply digging a deeper hole for them; one that they will probably never escape from. 

[tomwct]

As long as the payments are lower than their retirement pay!

[doremifasol]

Little  red riding hood .........where are you?

Said the wolf.............

[Alive]

Another buyout of civil servants. Since the beginning of the return of glory to the nation , there have been pay raises and no doubt more. I know teachers well and from what I see they've got it quite good while providing a lot of crappy education. They get higher pay each year and lots of benefits from their schools and civil service. And as civil servants, they get retirement money, and free health care. And civil servants get free healthcare for their parents once they become civil servants. Many get free Masters Degrees and even PhDs if they are willing to do the work. Some of them make good money doing extra teaching. The whole civil service should be investigated to find the civil servants who are poor, the ones who aren't married to generals or other wealthy officials like Prayuth's wife and so many others are. Help the working poor and don't give another freebie for civil servants who don't need it.  Prayuth and his regime toss a lot of money around that doesn't actually solve problems.

[PatOngo]

Teacher Daeng; If a bowl of tasty noodles cost 30 baht but I only have 20 baht, what should I do?

Student Somchai; Tasty noodles!.......eat 3 bowls.

Teacher Daeng; You nailed it Somchai...I'll get 2 bowls for you too!

[waldroj]

Unfortunately, I believe that it is NOT an appropriate solution for the "problem" of Teacher debt!

 

This is a continuation of the issue reported by ThaiVisa back in November 2015 (http://www.thaivisa.com/forum/topic/874024-thai-education-staff-sinking-in-debt-seek-a-lifeline/). This article reported that, "...there are 13,405 teachers and other education personnel in a "critical state" of debt with GSB after failing to pay debt instalments for three months in a row and were facing lawsuits...".

 

Providing loans to teachers who are already heavily indebted is problematic for two reasons:

• First, whilst is may seem to offer hope, it also provides the mechanism for these financially-challenged individuals to dig a deeper debt hole for themselves (as Brer Fox notes above); and,
• Second, it does not address the similar problem facing other civil servants (including police), and those in the private sector. As civil servants, teachers already receive additional benefits (Medical Benefit scheme, Pension Scheme ) that many in the private sector do not, so why to they qualify for special treatment?

Compounding the problem for everyone, Thailand Business News suggests that In Thailand...half of house-hold debt is "...consumption-related with credit-card, personal loans and auto loans..." (http://www.thailand-business-news.com/banking/53291-household-debts-hit-highest-8-years-filling-pockets-thai-loan-sharks.html).

 

This current initiative merely treats a symptom rather than the root cause of a problem facing not only teachers in Thailand, but many other individuals as well.

 

A more appropriate solution would have been to carry out regulatory reform that specifically targets personal unsecured loans (especially to low-income households). Maybe, it may also be prudent for the GSB to consider writing off some of the current teacher-debts rather than giving out more Public money as, what must be, high-risk loans?

 

 

Edited September 15, 2016 by waldroj
Acknowledged other poster's comment.

[edwinchester]

Sister in law is a teacher and I know a few others too.

The ease at which they all can get soft loans is incredible and are given with little or no questioning as to the ability to repay.

All but one teacher are massively in debt which will take years to pay off.

Everyone of them used the loans for new cars, new computer and new phone.

[maoro2013]

And they teach our kids!!

[JAG]

22 minutes ago, edwinchester said:

Sister in law is a teacher and I know a few others too.

The ease at which they all can get soft loans is incredible and are given with little or no questioning as to the ability to repay.

All but one teacher are massively in debt which will take years to pay off.

Everyone of them used the loans for new cars, new computer and new phone.

And of course the cars, phones and computers will be old, broken and worn out long before the loans have been repaid.

[mtls2005]

The current "government" is doing a lot of refinancing these days.

[adhd]

what about EDUCATING the teachers & the rest of the populace to not spend over your means ?

[NongKhaiKid]

There's another thread about the call for civil servants to be role models.

[whatproblem]

31 minutes ago, adhd said:

what about EDUCATING the teachers & the rest of the populace to not spend over your means ?

One cannot question a teacher /police officer / government worker / wealthy person 

[robblok]

3 hours ago, NongKhaiKid said:

How many teachers happily get into debt, extra debt banking on the hope the govt will bail them out, again ?

Seems a lot similar to the farmers.. I don't support this for either one... living within ones means should be promoted. 

[NongKhaiKid]

10 minutes ago, robblok said:

Seems a lot similar to the farmers.. I don't support this for either one... living within ones means should be promoted. 

I used to use a small guest house run by a husband and wife assisted a teenage girl on holiday from her school.

After one of her days off she came in proudly displaying the new phone she just bought but a couple of days later she was asking for a loan as she had spent the money she had to pay for her next term's tuition on the phone !

[robblok]

5 minutes ago, NongKhaiKid said:

I used to use a small guest house run by a husband and wife assisted a teenage girl on holiday from her school.

After one of her days off she came in proudly displaying the new phone she just bought but a couple of days later she was asking for a loan as she had spent the money she had to pay for her next term's tuition on the phone !

Yea I heard about this a lot.. but not only in Thailand. I am an accountant and I work with a debt restructuring from in the Netherlands for consumers.  Lots of Dutch people (usually the ones that are not too educated and don't have too much money) do the same things. Its not a totally Thai thing.. its more because credit is easy and people want to keep up with others.. plus many of those are not too bright and just don't seem to plan how to use their money well. 

[chainarong]

Encouraging people to take on further debt, when they can't afford the present level, will make their life worthless, the live for today mentality is great until you age , then the minuses start to kick in , however ,  have you noticed a particular trait with Thai's , it is called fast track,  and it hasn't solved anything,  the drought problem has been fast tracked each year for two decades , I rest my case. 

[Retiredandhappyhere]

I knew a Thai female University student with one year of study left who was planning to become a mathematics teacher.  The problem was that her parnets had separated and she was now struggling to pay for the next term's fees and accommodation.  She "acquired" a foreign boyfriend who spent his holiday with her and before he left he gave her 40000 bahts to help her pay the fees for the coming year. 

 

Exactly one week later, she phoned me hoping for cash to pay her fees.  I asked her what had happened to the 40.000 she had told me about. She said that she had spent 22000 on a new laptop and 18000 on a new phone, all in 7 days, and was already in debt again.  A year later and she will be teaching students all about mathematics!  I will leave you to guess what my response to her request was.

[SoFarAndNear]

I guess the loan givers expect that most teachers have side income by giving betters grades for $$$.

[pookiki]

I agree - a solution that solves nothing. However, please remember that a consumption global economy depends on lots of stupid people with credit cards. Such in the nature of capitalism.

[BSJ]

It seems like only a year since the last teacher bailout!

[Krid]

59 minutes ago, robblok said:

Yea I heard about this a lot.. but not only in Thailand. I am an accountant and I work with a debt restructuring from in the Netherlands for consumers.  Lots of Dutch people (usually the ones that are not too educated and don't have too much money) do the same things. Its not a totally Thai thing.. its more because credit is easy and people want to keep up with others.. plus many of those are not too bright and just don't seem to plan how to use their money well. 

Robblok,  this topic is not referring to poor Thai citizens, but to the group that is placed on a pedestal in the Thai hierarchic society (teacher’s day…..), with the important task to deliver tomorrow’s people. Quite a while ago, before I left The Netherlands, the Dutch government  started to tighten the rules in the money-lending sector (increased customer income screening) .  

The latter led desperate people to the “slaughter area of  shady money advertisements” in all kind of newspapers and magazines, which can be compared with similar “shady institutions in Thailand”,  which are targeted by the military government nowadays.

[Srikcir]

2 hours ago, mtls2005 said:

The current "government" is doing a lot of refinancing these days.

Government "soft" loans are essentially socialist programs that cost the Thai taxpayers, including the very people who receive such loans if they have taxable income.

For example, if a teacher is pays back a Bt300,000 loan at the market interest rate of 10% per year for 20 years, the total loan cost to the teacher for principal and interest is about 2 million baht. If instead the teacher only pays a government set rate of 4%, the total cost to the teacher is about 650,000 baht. The cost to the government is 1.35 million baht. If 20,000 teachers participate in the government loan program, the cost to the government is 27 billion baht, assuming no default.

 

[kaleevala]

My Thai GF schoolteacher borrowed 30 million baht to fund her ex husbands business. Business went bust. He took off. She is left with a debt she can not repay. The Teachers Credit Union makes these loans because the borrower gets other teachers to co sign the note. Their government pensions serve as collateral! It is a common practice with predictable results. A domino effect of bad debts and deepening poverty. Thailand has no personal bankruptcy protection. The banks will not allow it.

[Caveat Emptor]

59 minutes ago, Retiredandhappyhere said:

I knew a Thai female University student with one year of study left who was planning to become a mathematics teacher.  The problem was that her parnets had separated and she was now struggling to pay for the next term's fees and accommodation.  She "acquired" a foreign boyfriend who spent his holiday with her and before he left he gave her 40000 bahts to help her pay the fees for the coming year. 

 

Exactly one week later, she phoned me hoping for cash to pay her fees.  I asked her what had happened to the 40.000 she had told me about. She said that she had spent 22000 on a new laptop and 18000 on a new phone, all in 7 days, and was already in debt again.  A year later and she will be teaching students all about mathematics!  I will leave you to guess what my response to her request was.

One of so many stories on the same subject and although I'm not the best money manager I do like to pay bills and use money needed for a certain purpose for exactly that.

I never cease to be amazed that Thais manage to divert money needed for essentials to other purposes, often buying the latest something or other, with no regard to how bills, debts etc can be paid

 

[williamgeorgeallen]

6 hours ago, davehowden said:

God forbid they use the money to educate the kids!

plenty of money is spent on the education system in thailand. in fact thailand has a high level of funding for education. not sure why the level of education is so low. too much money just falls through the cracks and poor teaching methods may be possible answers.

as far as teachers getting into debt, is loaning them more money really going to help? do you give a drug addict more drugs to solve their problems? like all the government interventions this one will be miss used and just cause more problems overall.