REPAYMENT HARDSHIP ANALYSIS OF THAILAND'S STUDENT LOAN FUND
Keywords:
Student Loan Fund, Repayment Hardship, ThailandAbstract
Using the age-earnings profiles of the Student Loans Fund (SLF) borrowers, we analyze the repayment hardship for the undergraduate level. The current SLF is compared with our three proposed SLF schemes. We assume different grace periods of interest charge and loan repayment, and a 7% nominal interest rate, instead of 1%, for all schemes. Under the current SLF, average repayment hardship (as measured by the ratio of total re- payment to total income) of average graduates is roughly 4% of total income, while that of unlucky graduates (i.e. graduates whose income is in the bottom 10%) is three times as much. In case of the radically modified SLF scheme, of which all government subsidies are eliminated, the average repayment hardship of average graduates increases almost three times. As for unlucky graduates, their average repayment hardship raises more than two times.
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