Teachers threatening to stop repaying loans from the Government Savings Bank are risking bankruptcy and disqualification from government service, deputy justice permanent secretary Tawatchai Thaikyo warned on Tuesday.
He was responding to the announcement by leaders of a network of professional teachers' organisations meeting in Maha Sarakham on Saturday that their 450,000 members would stop paying off debts to the state-owned bank next month in protest at increasing interest rates.
"Be prepared to become bankrupt if you owe more than 1 million baht... If teachers and education personnel are declared by a court to be bankrupt, they will be disqualified from government services," Mr Tawatchai said.
Bankruptcy would also cause their guarantors to be bankrupted. Bankrupt people were also prohibited from going abroad, Mr Tawatchai said.
Uaichai Watha, head of the professional teachers network, said after the meeting that the GSB was raising interest rates to the point that total monthly payments of interest were twice as much as deducted principal. In addition, borrowers were forced to buy life insurance from the bank.
He was referring to GSB's loan programme for education personnel who are members of teachers' funeral funds. The loans are for teachers to repay debts with other financial institutions or informal creditors, buy houses, vehicles or shares, start businesses, or pay for education or other necessary transactions
About 450,000 teachers and education personnel under the Education Ministry borrowed about 400 billion baht in total from GSB under the scheme. Each debtor was allowed to borrow up to 3 million baht, with repayment over 30 years.
The teachers' network demanded a government approved six-month moratorium on repayments, to be followed by a cut in the interest rate to just 1%.
Prime Minister Prayut Chan-o-cha said later Tuesday that the Education Ministry discussed the issue with GSB which agreed to lower interest.
"Most teachers are repaying their debts well and disagree with any default. I have inquired about the matter from the Education Ministry. Do not let the issue grow. All parties must show understanding," Gen Prayut said.