The repayment period for loans under the Student Loan Fund (SLF) could be extended beyond its current limit of 15 years, according to SLF manager Chainarong Kajchapanan.
The fund was considering the extension to tackle defaults among SLF borrowers. For 20 years, the government has been granting loans to more than 5 million students via the fund.
However, the SLF has been hit by rising defaults and Mr Chainarong said the fund board has floated the idea of extending the repayment period from up to 15 years at present to possibly until the borrower retires at age 60.
The borrowers must start repaying upon employment. The repayment amounts per year, which vary depending on the size of the loans, increase every year as the borrower becomes more secure financially.
But some borrowers who have a job receive a low salary and run up high expenses, which inhibits their ability to repay the SLF. They will have more room and flexibility to manage their finances with a longer repayment period, according to Mr Chainarong.
Details of the proposed repayment period extension are being worked out by the fund, the SLF manager said.
Mr Chainarong explained that while the SLF was looking to increase the repayment period, it has now begun a fresh measure to chase after defaulters.
The fund has the legal right to deduct salaries of SLF defaulters, starting last month with the employees of state agencies. Next year, the deduction will be launched among employees of large private companies and later in smaller firms.
Of the more than five million borrowers, two million are defaulters owing debts of about 200 billion baht.
Mr Chainarong said that in the past 10 years, 85% of the loan guarantors are the parents of the borrowers while 14% are other relatives. About 0.1% of guarantors or at least 4,000 are teachers.
Last week, the plight of Wipha Banyen, a teacher who risks losing her house and land for posing as a guarantor for student loans, was exposed.
Twenty-one students she guaranteed failed to repay.
