Prime time relief: Govt’s debt deal targets students, teachers, and small-biz owners
A fresh debt relief package aimed at several demographics, including past students embroiled in student loan repayments, teachers, and owners of small-to-medium businesses, is set to be unveiled by the government, according to Prime Minister Srettha Thavisin‘s announcement yesterday.
The Bangkok-born Thai PM added that this package, which will also extend to individuals making repayments to non-banking lenders, is expected to be launched by the end of the current month.
In a move to address the debt issues plaguing various groups, the government committee tasked with debt resolution drafted new guidelines on November 14. These guidelines primarily target former students grappling with their loan repayments, offering them an improved means of managing their debt.
The 61 year old Thai prime minister noted that these guidelines have been broadened to include serious debt issues encountered by other sectors, which will be addressed in the impending debt relief package.
Lawaron Saengsanit, the Permanent Secretary for Finance and Chairman of the Student Loan Fund (SLF) board, revealed that a new regulation has been implemented. This regulation permits the SLF to modify the loan repayment calculation criteria, leading to a reduction in the overall debt amount.
According to this new regulation, the initial student repayments are directed towards reducing the principal amount. Only in later periods does the deduction of interest and late repayment fees take place. This shift in deduction order from the previous repayment criteria results in a considerable reduction in repayment amounts.
Changes to SLF
The new rule is effective immediately, offering potential benefits to the 3.5 million student loan borrowers. Their loan repayments are currently undergoing revision, reported Bangkok Post.
The altered SLF repayment calculation may also reveal that some long-term borrowers have overpaid their loans, allowing them to reclaim the excess amounts, as stated by Kittirat Na Ranong, chief advisor to the prime minister.
“Those who have overpaid can recoup their money, thanks to a new rule that became effective on March 20.”
The latest calculation methodology could potentially spare some SLF debtors facing foreclosure, as their loan amounts will undergo significant reductions. As such, approximately 46,000 individuals may avoid asset seizure and repossession.
