Student Loan Fund Faces Liquidity Crisis, Opposition Demands More Funding

The opposition People's Party has called on the government to allocate additional funding to Thailand's Student Loan Fund (SLF), warning that tens of thousands of students could be forced out of education because the fund lacks liquidity.

Rakchanok Srinok, a party-list MP for the People's Party, said the SLF faces funding shortfalls in both 2026 and 2027. She said the government has budgeted 7 billion baht too little for next year, while repayments from existing borrowers have also fallen short.

The fund was not designed to be fully self-sustaining, Rakchanok said. She cited two main factors behind its financial difficulties: changes to the Student Loan Fund Act in 2023 that reduced interest rates and penalties, cutting the fund's income, and declining state contributions.

Universities have reportedly warned some students that they may be barred from examinations if the fund does not pay their tuition fees, she said.

Rakchanok, who said she had relied on the fund while studying, urged the government to use central budget funds to cover the shortfall.

"Seven billion baht represents the lives of parents and the hopes of children who will not be able to borrow," she said.

"Not being able to borrow means dropping out of the education system, reducing their opportunities to earn a living."

She criticised Finance Minister Ekniti Nitithanprapas for not reallocating any of the more than 11.6 billion baht cut from the proposed 2027 budget to the SLF. The People's Party and other opposition parties had proposed transferring between 2 billion and 4 billion baht to the fund, she said.

The party called on the government to allocate central funds by 30 September to prevent public and private universities from removing students from enrolment; have the finance minister and permanent secretary for finance publicly guarantee that no student will be forced out of education; and ask public and private universities to defer tuition-payment deadlines while further assistance is arranged.

Theerasak Jiratraschu, another People's Party list MP, said the government must tackle loan defaults while also finding funding for new borrowers.

A student representative, Palathip Phimsuwan, said tens of thousands of students had not received loan quotas this year. In a survey of more than 1,600 affected people conducted over one week, 45% said they would have to drop out, take a gap year or defer their studies if they did not receive a loan allocation.