"If the students make repayments in line with normal procedure, it is likely the repayment will be completed more than 20 years after their graduation," student-loan fund manager Prempracha Supasamout said yesterday.

He called on rich parents to think twice before pushing their students into ICLs.

He said the loans would be subject to an annual interest rate equivalent to inflation from the day a loan was granted. Interest rates are capped at 5-per-cent per annum.

Repayments are only demanded when graduates earn Bt16,000 or more a month. Those who earn between Bt16,000 and Bt30,000 a month are required to pay a minimum monthly instalment of 5 per cent of their monthly income.

Those earning between Bt30,001 and Bt70,000 a month are required to make monthly instalments of 8 per cent of their salary.

Those who earn more than Bt70,000 are required to make monthly repayments equivalent to 12 per cent of their monthly income.

"Please note that accumulated interest will amount to quite a lot by the time many loan recipients are earning Bt16,000 a month," Prempracha said.

He said many students could be looking at four years before they made their first repayment. ICL has set the Bt16,000 benchmark to ensure people can pay it back and still have enough money to live on.

"ICL will be useful to most students. However, it seems many students who don't need loans are interested in applying too," Prempracha said.

Prempracha said students who had already submitted applications could withdraw them, as long as they had not signed the loan contract.

A freshman at Huachiew Chalermprakiet University's Faculty of Chinese Medicine, who identified himself only as "Tar", said about 45 first-year students in his class had applied for an ICL. Each semester costs Bt39,430.

"I applied for ICL because I want to pay for my own education," he said.

He admitted he submitted his ICL application without knowing that interest would begin to accumulate as soon as he signed the contract.

"If the interest rates apply from the year I start my higher education, I'm afraid my loan will amount to too much by the time I can start repaying it," he said. Tar, from a well-to-do family, admitted he might have to review his decision to apply under ICL conditions.

Poramet Jiaranant, 18, a student at Huachiew Chalerm-prakiet University's Faculty of Pharmacy, has just applied for Bt26,000 to pay for this semester's tuition fees.

That's not much more than what his parents paid for him during his secondary years at Bangkok Christian College.

"I want to grow into a responsible young man. I didn't know interest was payable from when I began," he said.

His classmate, Sornrutai Wuthapanich from Kasetsart University's demonstration school, said she found ICL interesting because it would reduce the burden on her parents.

"If I die, my parents won't have to pay the loan," she said.

The ICL programme also writes off debts owed by people more than 60 years old.

Urisara Kowitdamrong

The Nation