EDUCATION DEBT
Growing numbers choose to default on student loans
SIRIKUL BUNNAG
Young people in the provinces with state student loans are increasingly refusing to pay them off, being convinced the government dare not charge them for fear of losing public support. The practice has become so common that the Student Loan Fund (SLF) is struggling to deal with about 90,000 defaulters.
''Relatives of the people with debts have told them the government would do nothing, even if they do not settle their debt.
''It cares too much about its political support in the provinces,'' said Sa-nguan, 25, a debtor from Roi Et province who declined to reveal his last name.
As a result, he said, many of his friends had decided not to repay the money, even though their actions would lead to fines with higher interest rates on their loans.
Unlike his colleagues, university graduate Mr Sa-nguan, who owes only 2,000 baht to the SLF, said he planned to start settling his debt this year after finding a job.
''I've realised that I should repay the money so that the fund will be able to lend money to other new students,'' he said.
The SLF is a revolving fund. Officials need repayment to fund new student loans.
However, not all debtors get jobs like Mr Sa-nguan. Limited incomes are the major reason behind the many defaulted loans.
''I will not escape, but I will not pay off my debt,'' said Rampai, 25, a defaulter and a young mother.
Mrs Rampai borrowed 200,000 baht from the SLF to fund her high school and university studies. She now earns a bit more than 4,000 baht a month and spends it all on her monthly expenses. Her family has advised her not to rush to pay off the debt, because the large number of debtors will delay government efforts to get the money from her.
''Even though it has lodged a lawsuit against me, I am unable to pay off my debt,'' said Top, 26.
Top believed authorities were unable to find him because he always changed his first name, last name and address. His grandfather and grandmother, who were guarantors, were already dead, he added.
SLF manager Thada Martin warned that people who avoid repayment would be fined 12% of their debt.
He suggested that those with monthly incomes of less than 4,700 baht discuss their debt-relief plans with the Alternative Dispute Resolution Office in Bangkok to help solve the problem.
However, he said, only 3,000 of the 90,000 debtors have so far followed his advice to negotiate a new debt repayment plan.
Altogether, about four billion baht was owing. To take legal action would cost the SLF about 400 million baht, according to the office.
''Such a false way of thinking is very dangerous to our fund,'' said Mr Thada. ''They have to realise that the fund is crucial to other needy, poor students.''
His office expects about 800,000 students to apply for loans in the new academic year. About 350,000 students are expected to apply for loans this year.
Bangkok Post Jan. 21, 2008