Thailand’s Student Loan Fund expands reach to address ageing society needs

The Student Loan Fund (SLF) in Thailand, managed by Chainarong Katchapanan, announced plans to extend its loan services to all working-age adults, aged between 18 and 65. The move, aimed at upskilling and reskilling, is in response to Thailand’s shift towards an ageing society.

This initiative will be implemented by the end of this year, marking the first time since its establishment in 1996 that the fund has expanded its reach beyond formal educational institutions.

The decision aligns with the policy to broaden educational opportunities as outlined in the revised Student Loan Fund Act of 2023. Furthermore, around 200 institutions that provide nursing care education, another critical need in an ageing society, are expected to benefit from this loan scheme by the year-end.

The loan amount will be limited to 50,000 baht per borrower, targeting approximately 2,000 individuals. The reorientation of the fund is attributed to its recognition of non-formal educational institutions, such as vocational institutes, which offer essential short courses of up to 150 hours for workforce upskilling or reskilling. Short-course study programmes include hotel management, underwater welding, and spa therapy, in addition to caregiving.

Students seeking a loan must enrol in a study programme, not exceeding one year, at a non-formal educational institution accredited by the Office of the Private Education Commission. The loan has a two-year grace period, followed by a two-year debt repayment requirement.

For a two-year repayment period on a loan amount of 50,000 baht, the monthly instalment averages out to 2,000 baht. As per the amended SLF law, the fine for late payments has been reduced from 7.5% annually to 0.5%, while the interest on the loan remains capped at 1%. This rate is considered the lowest in the domestic financial system.

Outstanding loans

To date, the fund has lent a total of 700 billion baht to 6.2 million students. Outstanding loans amount to 350 billion baht from 350,000 borrowers. However, approximately 90 billion baht, which accounts for nearly 30% of the outstanding loan balance, has not been repaid by the due date.

For the 2023 academic year, the fund has increased the loan limit to 46.1 billion baht from 40.7 billion, an increase of 13% to support the growing demand for student loans. The number of students receiving loans has risen by 117,000 to 760,000.

As of September 12, debt repayment totalled 25.7 billion baht. The fund is in the process of drafting a contract for dispute settlement and debt restructuring for both “pre-sue” and “post-sue” debtors, which is expected to be finalised by the end of this year.

Previously, the Fiscal Policy Office reported that Thailand became an ageing society in 2005, with at least 10% of the population aged 60 or older.

In 2019, the older population surpassed the younger population for the first time. With a slow population growth rate of 0.5% per year and an increased average lifespan of 76 years, Thailand is projected to become an “aged” society either this year or next, where those aged 60 and older will constitute 20% of the population.

By 2034, the nation is expected to transition into a “super-aged” society, with the older population accounting for 28%, reported Bangkok Post.

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