The government plans to lower the interest rate for the Student Loan Fund to alleviate the burden on borrowers.
According to permanent finance secretary Krisada Chinavicharana, the draft law amending the fund will set the new interest rate of the fund at a maximum of 2%. The draft law was passed in the first reading by the House of Representatives, and the second and third readings are expected to be held this year.
The finance secretary also clarified the fund’s interest rates and fines, stating that the 7.5 percent rate for fines is due to borrowers failing to repay their debts for an extended period of time, resulting in cumulative penalties. He urged borrowers who are having difficulty repaying to contact the fund in order to work out a way to settle the debt without going to court, which would result in these fines.
The fund has already reduced the interest rate to 0.01% to alleviate the burden on borrowers during the Covid-19 pandemic. The interest rate will be in effect until the end of the year.
Since its inception, the fund has granted 6.21 million people loans totaling 692 billion baht. Repayments totaling 114 billion baht have been completed by around 1.56 million people. 3.52 million borrowers are currently repaying loans totaling 450 billion baht. Meanwhile, over a million people with a total loan of 121 billion baht are currently in a repayment grace period.
The fund expects debt repayment of 32 billion baht in 2022. (NNT)
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