In recent days, social media has erupted with complaints from borrowers who suddenly found their salaries reduced by 3,000 baht per month to repay student loans from the Student Loan Fund (SLF). Many companies reported that the SLF directed them to make these deductions without prior notice to employees. During a parliamentary session on April 9, representatives from the People’s Party raised concerns, likening the SLF’s actions to those of illegal loan sharks and suggesting potential legal violations.
Ms. Nattawan Wongkacharakitti, the manager of the Student Loan Fund, addressed these concerns, explaining that notifications had been sent to borrowers’ registered addresses. These changes primarily affect those with existing overdue balances. Some borrowers had requested adjustments to their deductions but failed to pay the differences on time. Nevertheless, the SLF announced that options for debt restructuring remain available, including extended repayment periods and reduced interest rates.
This isn’t the first time the SLF has faced backlash over its policies. Discussions around repayment issues and deferrals have been ongoing, particularly concerning measures to manage ‘debt dodgers’ who fail to repay after graduation, impacting both the SLF and future students.
In light of these developments, it’s worth exploring the broader context of student loan debt in countries with high borrowing rates, such as the United States, the United Kingdom, and South Korea. Each of these nations faces its own challenges and solutions regarding educational debt.
The United States is often the first country that comes to mind when discussing student loan debt. Statistics reveal that approximately 50% of graduates from both public and private institutions carry student loan debt, with an average debt of about $29,300, or nearly 1 million baht per person. Many experts consider the student loan crisis in the U.S. to be severe, as high debt burdens diminish graduates’ ability to establish themselves financially. This debt can hinder home ownership, entrepreneurship, and retirement planning, ultimately impacting the overall economy by reducing consumer spending and posing obstacles to economic growth.
During his presidency, Joe Biden attempted to fulfill his campaign promise to eliminate student loan debt, achieving partial success. Many viewed the debt cancellation as unfair to those who had repaid their loans on time. The government also faced significant losses in tuition revenue from educational institutions nationwide. Biden’s plan aimed to forgive $10,000 to $20,000 in student debt per borrower, but it faced challenges in implementation. However, some forms of debt relief were granted, such as for permanently disabled individuals and those working in public service or non-profit organizations who could have their debts canceled after a specified period of employment.
As of late 2024, the total student loan debt in the U.S. stood at approximately $1.77 trillion, encompassing both federal and private loans, with around 42.7 million borrowers. The average debt per borrower was about $38,883, or around 1.3 million baht.
Across the Atlantic, the United Kingdom is grappling with its own educational debt crisis. As of March 2024, the outstanding student loan debt in the U.K. reached a staggering £236 billion, making it the highest in the world. The government anticipates this figure could rise to £500 billion by 2040. Currently, students receive loans of approximately £20 billion annually, with the average debt per graduate ranging from £43,700 to £45,600, or roughly 1.9 to 2.1 million baht.
A significant factor contributing to the crisis in the U.K. is the repayment conditions set for students who began their studies in August 2023. They are required to start repaying their loans only when their income exceeds £25,000 per year, with repayments deducted directly from salaries. Additionally, debts are automatically canceled after 40 years for those unable to repay. Many borrowers struggle to make payments because their incomes fall below the threshold, leading to a situation where debts may not be repaid at all.
To address these issues, the U.K. government has implemented various measures, including lowering interest rates on loans to align with inflation as measured by the Retail Price Index (RPI). This adjustment ensures that borrowers will not repay more than the original amount borrowed, thereby encouraging repayment and improving the overall debt landscape.
Meanwhile, South Korea faces its own challenges with educational debt amid high household debt levels. Although the interest rates for educational loans in South Korea are relatively low—around 2.2% as of 2022—the overall debt burden remains a concern, especially in an uncertain economic climate. The Korea Student Aid Foundation (KOSAF) manages the government’s student loan program, which aims to help students access higher education without financial strain.
In 2022, KOSAF reported that 411,093 students borrowed funds for higher education, marking a 12.9% increase from the previous year. The total amount of loans provided to young people surged from 3.4 trillion won in 2012 to 8.45 trillion won in 2021. KOSAF offers various loan programs, including the Income Contingent Loan (ICL) that ties repayments to income levels, similar to the U.K. system. However, KOSAF has also faced challenges, with the amount of uncollectible loans reaching 27.489 billion won in 2022, a sixfold increase from four years prior, and the number of individuals unable to repay their debts rising to 4,778, seven times higher than in 2018.
While South Korea’s figures may not rival those of the U.S. or U.K., the trend suggests a potential crisis if the government does not address the rising debt issue among young people promptly.
As these three countries navigate their educational debt landscapes, it becomes clear that student loan issues are a global concern, with each nation adopting different strategies to alleviate the burden on borrowers. The ongoing discussions in Thailand regarding the SLF highlight the importance of addressing student debt in a way that promotes fairness and accessibility for future generations.
