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Thailand's Student Loans Fund: Interest rate subsidies and repayment burdens

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  • Chapman, Bruce
  • Lounkaew, Kiatanantha
  • Polsiri, Piruna
  • Sarachitti, Rangsit
  • Sitthipongpanich, Thitima

Abstract

Government student loan schemes typically have implicit interest rate subsidies which, while these are a cost to taxpayers, they have the benefit of diminishing repayment burdens for graduates. Our goal is to illustrate the extent of both interest rate subsidies and repayment burdens with respect to Thailand's Student Loans Fund (SLF), using methods pioneered in measurement terms by (Ziderman, 1999) and (Ziderman, 2003). Our critical innovation is to calculate repayment burdens for graduates with widely differing earnings, and we find that these generally are relatively low because the SLF is heavily subsidized. Even so, for graduates with very low income the burdens can be high. Importantly we analyze and illustrate what the repayment streams would be if the SLF was redesigned to have no interest rate subsidies and find that the burdens increase to extremely high levels for the lowest income graduates. The results are considered in the context of the analysis of income contingent loan schemes for Thailand presented in Chapman and Lounkaew (this issue).

Suggested Citation

  • Chapman, Bruce & Lounkaew, Kiatanantha & Polsiri, Piruna & Sarachitti, Rangsit & Sitthipongpanich, Thitima, 2010. "Thailand's Student Loans Fund: Interest rate subsidies and repayment burdens," Economics of Education Review, Elsevier, vol. 29(5), pages 685-694, October.
    • Handle: RePEc:eee:ecoedu:v:29:y:2010:i:5:p:685-694
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    References listed on IDEAS

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    1. Bruce Chapman & Kiatanantha Lounkaew & Piruna Polsiri & Rangsit Sarachitti & Thitima Sitthipongpanich, 2009. "Thailand’s Student Loan Fund: An Analysis of Interest Rate Subsidies and Repayment Hardships," CEPR Discussion Papers 592, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. Bruce Chapman & Chris Ryan, 2002. "Income-Contingent Financing of Student Charges for Higher Education: Assessing the Australian Innovation," CEPR Discussion Papers 449, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    3. Dynarski, Mark, 1994. "Who defaults on student loans? Findings from the National Postsecondary Student Aid Study," Economics of Education Review, Elsevier, vol. 13(1), pages 55-68, March.
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    Cited by:

    1. Adrian Ziderman, 2013. "Increasing Access to Higher Education Through Student Loans," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(02), pages 11-18, July.
    2. Chapman, Bruce & Lounkaew, Kiatanantha, 2015. "An analysis of Stafford loan repayment burdens," Economics of Education Review, Elsevier, vol. 45(C), pages 89-102.
    3. Migali, Giuseppe, 2012. "Funding higher education and wage uncertainty: Income contingent loan versus mortgage loan," Economics of Education Review, Elsevier, vol. 31(6), pages 871-889.
    4. Chapman, Bruce & Doris, Aedín, 2019. "Modelling higher education financing reform for Ireland," Economics of Education Review, Elsevier, vol. 71(C), pages 109-119.
    5. Bruce Chapman & Lorraine Dearden, 2022. "Income-contingent loans in higher education financing," IZA World of Labor, Institute of Labor Economics (IZA), pages 227-227, October.
    6. repec:zbw:rwirep:0244 is not listed on IDEAS
    7. Bruce Chapman & Mathias Sinning, 2014. "Student loan reforms for German higher education: financing tuition fees," Education Economics, Taylor & Francis Journals, vol. 22(6), pages 569-588, December.
    8. Chapman, Bruce & Liu, Amy Y.C., 2013. "Repayment burdens of student loans for Vietnamese higher education," Economics of Education Review, Elsevier, vol. 37(C), pages 298-308.
    9. Bruce Chapman & Kiatanantha Lounkaewa, 2010. "Repayment Burdens with US College Loans," CEPR Discussion Papers 647, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    10. Heitor, Manuel & Horta, Hugo & Leocádio, Miguel, 2016. "Enlarging the social basis of higher education: Lessons learned from extending a social support system with a risk-sharing loan scheme in Portugal," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 319-327.
    11. Adrian Ziderman, 2013. "Increasing Access to Higher Education Through Student Loans," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(2), pages 11-18, 07.
    12. Ali Ait Si Mhamed & Rita Kaša & Zane Cunska, 2012. "Student debt levels and income of University of Latvia graduates: Prospects for income-contingent loan repayment by the field of studies and gender," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(2), pages 73-88, December.
    13. Bruce Chapman & Mathias Sinning, 2011. "Student Loan Reforms for German Higher Education: Financing Tuition Fees," Ruhr Economic Papers 0244, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    14. repec:ces:ifodic:v:11:y:2013:i:2:p:19092421 is not listed on IDEAS

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