The Student Loan Fund (SLF) now has access to the personal information of borrowers to help it tackle defaults more effectively, SLF manager Chainarong Katchapanan said on Friday.
The SLF Act was amended this year and passed into law allowing the fund to gain access to the information of borrowers who have finished their education and are currently employed in the private sector or who work for the state.
Once employed, they are legally bound to start repaying their debts to the SLF. But as so many have attempted to skirt this obligation the reservoir of funds needed to disburse new loans is drying up, officials claim.
The SLF typically grants loans to underprivileged and impoverished school and university students.
The fund can now obtain their contact numbers and financial records as their employers are legally obligated to provide these details if requested, Mr Chainarong said.
The SLF has extended 553 billion baht of loans to 5.28 million students since its inception but levels of bad debt have spiralled.
About two million borrowers now owe 62 billion baht to the state. The SLF has filed court action against 1.2 million defaulters in a bid to recoup the outstanding debts.
This year alone, the fund is pursuing legal action against 140,000 defaulters who failed to pay back loans of 15 billion baht.
Despite the staggering rate of defaults, Mr Chainarong said the repayment rate has been slowly improving among those who have taken out student loans since 2015.
That year saw repayments total 18.3 billion baht. This jumped to 21.4 billion baht in 2016 and is expected to climb to 25 billion baht this year.
Under the amended law, employers must deduct a share of their staffer's salary each month and send it to the SLF until the loan is repaid in full.
The fund is also first in line among creditors to claim any money generated by a foreclosure of the borrower's assets in the event of bankruptcy.
The SLF Act was first amended in 1998 during the Chuan Leekpai administration. The latest revision saw the interest rate shift significantly from 1% to up to 7.5%.
