Thailand’s Student Loan Fund: An Analysis of Interest Rate Subsidies and Repayment Hardships
AbstractThis paper presents analysis of the implicit subsidies and repayment hardships of Thailand’s Student Loan Fund (SLF). Comparisons are made between the current SLF with alternative similar schemes, assuming different rates of interest and loan repayment periods. We find that the implicit interest rate subsidy is about 66 per cent, with much of this being due to the fact that the scheme charges only a 1 per cent per annum nominal interest rate. The repayment hardships, measured as the proportion of a graduate’s income allocated to servicing the debt, are around 4 and 3 per cent, for female and male graduates earning average incomes by age. However, these increase to 12 and 10 per cent for female and males whose earnings are in the bottom deciles. The current SLF is generous in terms of repayment hardship for the borrowers. However, the scheme appears to be unsatisfactory in terms of the extent of implicit subsidies.can generate a large (non-marginal) switch to home production and the ensuing deadweight losses are large. Using a cross-country panel, we find that gender differences in labour supply responses to tax policy can explain differences in aggregate labour supply and years of education across countries.
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Bibliographic InfoPaper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 592.
Date of creation: Jan 2009
Date of revision:
student loans; higher education financing;
Find related papers by JEL classification:
- I00 - Health, Education, and Welfare - - General - - - General
- I2 - Health, Education, and Welfare - - Education
- I20 - Health, Education, and Welfare - - Education - - - General
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-13 (All new papers)
- NEP-LAB-2009-04-13 (Labour Economics)
- NEP-SEA-2009-04-13 (South East Asia)
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