The Thai Senate passed the third reading of a bill yesterday (Tuesday) which seeks to lower the interest rate charged on loans extended to needy students to only 1% and no compound interest charged.

The bill was actively debated among the senators, with many of them disagreeing with the proposal of the House of Representatives that no interest should be charged under the Student Loan Program.

At the end of the debate, most senators voted in favour of an interest rate of only 1% per annum and there must not be compound interest charged.

Under the bill, the student loan committee will be authorised to exempt or reduce interest charged on borrowers with good repayment records on case-by-case basis.

The bill will now be returned to the House for finalisation and, if the House disagrees with the Senate’s amendment, a joint committee may be set up to reconsider the bill.