“Have you ever considered taking a student loan?
“If you have…why?”
“If you have not…why?”
Let’s keep your answer to this question for now.
Actually, taking a student loan to pay for education is not a new concept in Thailand. Indeed, the Student Loan Fund was established according to the Resolution of the Cabinet on 28th March 1995 and has been operating as a working capital according to the Resolution of the Cabinet since 16th January 1996. Therefore, it could be said that student loans have been available in Thailand for almost 30 years.
However, there were approximately 1.3 million undergraduate students in 2022, of whom only 280,000 students applied and received student loans in Thailand, which accounted for only 21.5% of all undergraduate students that year. This reflected that student loans are not a popular option for the majority of undergraduates in Thailand. In addition, only 28% of high-school graduates pursue higher education in universities. Although there can be various reasons for not continuing on their educational journey, the cost of education and economic status are definitely one of the key reasons influencing the decision. This view is backed by the analysis report on poverty and inequality in Thailand by the Office of the National Economic and Social Development Council, which states that “Students from poor households have fewer opportunities to access higher education and there is also an increased chance of falling out of the education system due to economic problems.”
It is striking that even when a portion of students have problems with the cost of university education and Thailand has a Student Loan Fund to specifically address this problem, taking out a student loan still not a popular option in Thailand. This differs from students in many countries who view that student loans are not only the norm and the preferred choice of many, but also a right and welfare that the state has the responsibility to provide for them. The Matilda Foundation considers that part of the problem in Thailand lies in the common attitude that “taking out loans” equals “incurring debt” and is “the option of the poor”, as well as the students and their families’ inability to see education as an investment or a tool to help elevate their professional and social status that could help them break the social class trap.
Student Loan: A universally accepted policy to promote access to higher education
Student loan programmes are standard policies for many countries around the world. Apart from increasing access to education, which is a standard right for the people, student loans are also considered an important investment in human resources for each country. Educated population equipped with skills and educational qualifications are valuable resources for any country because they are more likely to help drive the economy, innovation, and increase the country’s competitiveness. Furthermore, student loan programmes can also be designed to support students to study degrees in fields that are in high demand for the labour market or necessary for the country’s development, such as in STEM (Science, technology, engineering, and mathematics) education.
Examples of student loan programmes in foreign countries.
Country | Amount of loan | Interest Rates | Repayment |
U.S. | The educational institutions determine how much money can be granted for student loans | 2.75% - 5.3% depending on the different student loan programmes and the education level. | For general student loans, the approximate repayment time takes about 10 years and can be 25 years for the Extended Repayment Plan. |
England | The loan ceiling is limited to £9,250/year (Ref. 2023-2024) | No more than 7.3% and will be calculated according to the Retail Price Index | Repayment begins when income is at least £423/week, or £1,834/month, or £22,015/year |
Australia | The loan ceiling is limited to 113,028 AUD for general degrees and 162,336 AUD for medicine, dentistry, veterinary, or some selected degrees in aviation. | 0% | Repayment begins when income is at least $51,550/year (Ref. 2023-2024). Each repayment increases with the level of income. |
New Zealand | The loan covers education cost and other related costs, including living allowances. | 0% if remains in NZ upon graduation and 2.9% if chooses to leave the country. | Repayment begins when income is at least $22,828/year or $439/week. |
It is evident from the table that student loan programmes in each country differ in detail, be they interest rates, expenses that the loans cover, repayment conditions, etc. Nevertheless, every country’s loan programmes answer the need to increase access to education, invest in human resources, and produce human resources that the market needs.
Moreover, the choice to take out student loans to pursue university-level education is also rather popular in other countries. For example, more than 42% of public university students and 68% of private university students in the U.S. apply and receive student loans. For the United Kingdom (England), approximately 1.3-1.5 million university students out of around 2 million apply for student loans each year. And, in addition to states being the loan providers, the private sector and civil society can also provide student loans. For example, private banks, private companies, or foundations. Indeed, the Matilda Foundation is also one of the organisations that support education in the form of student loans.
A New Perspective on Student Loans: Not “Debt”, but “Investment”
The reason why student loans are not so popular in Thailand may be partly due to the perception that “loans” are “debts”, so student loans are considered an added burden on people who are already in economic difficulties. However, there are some important facts that should not be neglected. Higher education is both governmental investments in their population as well as investments individuals make on themselves. Looking only on the surface that student loans are merely “debts”, to which the ability to repay are yet unknown, may be a result of the inability to see that university education can create sustainable income in the future, through the knowledge, skills, and educational qualifications that will be obtained through the process.
Therefore, one solution to this problem is to create awareness among the younger generations that student loans are not futile debts, but rather investments in order to achieve higher income and an important tool available for them to overcome social class traps.
Upon closer consideration, all paths in life come with their own constraints and conditions. For example, choosing to receive a scholarship comes with commitments regarding your workplace upon graduation or what you study, not pursuing higher education also comes with its own opportunity costs, and opting for a student loan comes with conditions of timely repayment. When we view access to education as a basic right, as an investment in our own potential, and as a path that leads to a better life, taking student loans is one effective and viable instrument to support the realisation of these goals that should not be frowned upon. It is a common choice of the majority in many countries, neither shameful nor riskier than any other options.
Reference
Student Loan fund in Thailand https://www.studentloan.or.th/th/aboutus
Student loans provided in 2022 https://www.studentloan.or.th/th/system/files/files/aboutus/O16%20%E0%B8%94%E0%B9%89%E0%B8%B2%E0%B8%99%E0%B8%81%E0%B8%B2%E0%B8%A3%E0%B8%81%E0%B8%B9%E0%B9%89%E0%B8%A2%E0%B8%B7%E0%B8%A1.pdf
Evaluation of the Student Loan Fund in Thailand https://searchlib.utcc.ac.th/library/onlinethesis/263850.pdf
Statistics of undergraduate stidents in Thailand https://gdcatalog.go.th/dataset/gdpublish-dataset-15_20
“Did not pursue higher education because of poverty – exploring Thai students attendances” https://workpointtoday.com/educational-inequality-2/
Analysis report on poverty and inequality in Thailand by the Office of the National Economic and Social Development Council https://www.nesdc.go.th/ewt_dl_link.php?nid=11972
Percentage of students attending 2-year and 4-year institutions who have student loans in the United States 2019/20 https://www.statista.com/statistics/237883/percentage-of-us-students-with-student-loans-by-institution-type/
Student Loan Statistics (England) https://commonslibrary.parliament.uk/research-briefings/sn01079/
Higher Education in Numbers (England) https://www.universitiesuk.ac.uk/latest/insights-and-analysis/higher-education-numbers
Information of student loans in England https://www.bbc.com/news/education-62241512 andhttps://www.gov.uk/student-finance
Information of student loans in the U.S. https://studentaid.gov/
Information of student loans in Australia https://www.studyassist.gov.au/help-loans
Information of student loans in New Zealand https://www.studylink.govt.nz/products/a-z-products/student-loan/index.html
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