Jobless graduates default on student loans
About 30 per cent of student-loan recipients in the previous student-loan programme have defaulted mainly because they cannot find jobs or earn less than Bt4,700 a month after graduation, student-loan fund manager Prempracha Supasamout disclosed Sunday.
He said the student-loan programme, which was open to students from low-income families until last year, had approved loans to 2.5 million students to the tune of Bt216billion. Many of the recipients have not yet reached their repayment time.However, of those who were required to start repaying, only 70 per cent did so. Prempracha said his office thus commissioned the Chulalongkorn University to conduct the study as to why the loan recipients failed to get jobs or earn more than Bt4,700 a month after their graduation. In the previous student-loan programme, those who earned less than Bt4,700 a month were not required to repay. According to the study, the problems mainly stemmed from the fact that the loan recipients have graduated in the fields unresponsive to workforce market's needs or in the fields where there were already too many graduates. Other main reasons were that the graduates started a family right after their graduation or chose to further their education. Prempracha Sunday disclosed that the number of graduates from the fields of law, political science, economics and business administration were too many for them to find jobs. "The supply is far outnumbered by the demand here," he said. He added that those with business-administration certificates from vocational schools had difficulty finding jobs because they were still not experts required in real market. Prempracha said the situation would be better if vocational schools focused more on producing skilled workers, who will find jobs more easily. This year, the government has launched a new student-loan programme in place of the previous one. Dubbed as "Income-Contingent Loan" (ICL), the new programme require the loan recipients to start repaying loans only when they earn more than Bt16,000 a month. The new programme was open to all students regardless of their financial status. Prempracha said the new programme would be designed to encourage educational institutes to produce graduates in fields responsive to the market's needs. "Within three years, everything about the new programme should be settled," he said. He added that the government also granted Bt4billion budget to his office for scholarships to students from cash-strapped families. "The recipients of scholarships must never participate in student-loan programmes," Prempracha said. He said kindergarten students up to university students could apply for scholarships via their educational institutes. The Nation
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