The Student Loan Fund (SLF) faces a severe deficit of 7 billion baht, impacting new borrowers and leaving students uncertain. MP Kru Nueng from the People’s Party points out that the solution is not merely accelerating debt collection but requires fostering discipline and awareness, transforming SLF’s perspective into "educational welfare" for sustainable problem-solving.
At the House of Representatives meeting on 17 Sep 2026 GMT+7, Ms. Rakchanok Srinok, a party-list MP from the People’s Party, raised a question on the SLF’s crisis of uncertainty. Many first-year students are at risk due to unpaid tuition transfers, causing some universities to threaten suspension of studies. Meanwhile, SLF's fund shows a deficit of 7,037 million baht this year, yet no budget of 11,000 million baht has been allocated to replenish the fund.
Mr. Pradorn Prissanantakul, Minister attached to the Prime Minister’s Office, explained that SLF is a revolving fund that the government cannot continuously fund. Of 3.6 million borrowers, only 1 million repay regularly, while 2.6 million are delinquent. Recovering debt from just half of those able to pay would immediately increase the fund’s cash flow without requiring additional government subsidies.
The Thairath Online special team interviewed Kru Nueng (Mr. Theerasak Jiratratru), a party-list MP from the People’s Party, about solutions and debt management for SLF. He said he may not come from a financial background but sees two main groups among delinquent borrowers.
The first group is those who simply cannot pay, often due to unemployment or inability to find work, leading to non-performing loans (NPLs). These borrowers usually lack understanding of negotiation or repayment relief options with SLF, which is actually flexible and able to offer reductions. Without this knowledge, their debts become classified as bad debts.
The second group intentionally defaults, believing SLF’s debt collection process is slow. They transfer assets to relatives and plan for bankruptcy lawsuits, thinking that after two years they can escape repayment. This behavior is even discussed on online platforms like X (Twitter), prompting the government to link SLF with credit bureaus. Additionally, some borrowers have jobs but low income and excessive debt, choosing to prioritize payments to financial institutions with higher penalties over SLF, which has lower penalties and negotiable terms, thus deliberately defaulting on SLF first.
Previously, fund managers treated SLF like a regular financial institution, resorting to legal actions—lawsuits, asset seizure, and bankruptcy filings—without creative approaches to encourage repayment. There is a lack of tools such as apps for reminders or positive incentives to raise awareness that repaying debt benefits future students.
Approaches to cultivate financial discipline include requiring borrowers to repay small amounts annually, for example 500 baht, to monitor repayment behavior. If a borrower fails to pay the first year, they may still be given a chance, but failure to pay in years two and three signals a lack of discipline, warranting suspension of further loans to avoid future SLF burdens. Although this may not be the perfect method, it offers a monitoring framework.
For intentional defaulters, beyond credit bureau linkage and annual rights suspension, financial penalties should prevent them from borrowing elsewhere. Collaboration between SLF and government or private agencies—such as salary deduction—should be enhanced. However, as more people work outside formal systems, challenges arise. Regarding outsourcing debt collection, Kru Nueng considers it normal for financial institutions to use private firms skilled at asset tracing. Some banks even sell bad debts for external management. SLF might consider such debt sales, but currently follows traditional collection leading to lawsuits, constrained by limited staff and collection rates similar to other financial bodies.
There are two views on debt collection goals. The first emphasizes maximizing collection to enable more new borrowers, as Mr. Pradorn suggested.
The government still focuses primarily on debt collection, but Mr. Pradorn has not clearly explained how this will be managed or which budget will be allocated to address these issues.
Conversely, the second perspective holds that collection success should not affect new borrowers’ access. SLF should be viewed as a government fund ready to assist genuine borrowers. Recovered debts should return to the fund per the law; otherwise, new borrowers unfairly suffer for past defaults. The state should adopt clear models to sustainably help borrowers find employment with minimal investment—for example, offsetting paid taxes against SLF debts. Though possibly seen as a loss, this approach sustainably supports employment, a model still rare in Thailand.
When asked about serious debt collection measures, Kru Nueng said legal actions and property seizures are already strictly enforced under civil law and are the extent of current options.
"The most important thing is not accelerating debt collection but how to instill discipline and awareness in new borrowers to repay."
Therefore, the focus should shift from aggressive collection to fostering discipline and awareness. He suggests discontinuing ineffective activities, such as requiring borrowers to perform more community service than normal borrowers, and instead using phone interviews through call centers to gently remind borrowers of their debt status. Additionally, implementing online learning about debt and financial management, with assessments before disbursing new installments—similar to driver’s license renewals—could nudge borrowers to better manage their debts. Currently, SLF has not adopted these methods.
Finally, SLF should reposition itself as a financial institution with the mindset of “educational welfare.” Given the current economic situation with low family incomes and high living costs, more students rely on SLF, as completing a bachelor’s degree is often the only path to higher income. SLF must understand this role and design lending systems with a welfare perspective, reducing non-performing loans concretely. Behavioral economics theories, like opt-in or opt-out models used abroad (e.g., the UK), could be applied to make borrowers aware from the start of their debt obligations and management. The recent liquidity crisis in SLF over the past 4–5 years also reflects the domestic economic downturn, acting as an economic temperature gauge.
