This page presents two articles about the work of Professor Medhi Krongkaew from the Thai National Institute of Development Administration.

By Professor Medhi Krongkaew
School of Development Economics, National Institute of Development Administration, Thailand


If you are in Australia and have an Android phone with Google Assistant facilities available already connected to the internet, try this:

Turn on the Google Assistant, with microphone enabled, and ask this question by speaking into your phone:

“Who is Bruce Chapman?”

and this is what you will hear from your lady Google Assistant:

“According to Wikipedia, Bruce James Chapman is an Australian economist and academic known to be the architect of the HECS system”.

In Australia, where there are so many people with the same name, Bruce Chapman, why this Google Assistant only picks up one name with specific qualification mentioned above?  This is because this Bruce James Chapman is really special and one of a kind.

In 1989, when he was an economic researcher at the Research School of Social Sciences (RSSS), a major research unit of the Australian National University in Canberra, he helped plan the launch of the Higher Education Contribution Scheme (HECS), the first Australian, and indeed, the world’s first, university students’ loan system where the repayment of the loan debt is based, or contingent, on the future income after graduation of the borrowing student.  The amount of loan will be sufficient to cover the required fees of the subject of the student’s choice, with no real interest charge, but the total accumulated amount of debt is indexed or tied to the annual inflation.  And the repayment of this debt only starts when the earned income reaches a certain, practically payable, threshold level, and will continue as long as this threshold income is attained until the debt is paid off, or at a certain retirement age when the remaining debt is forgiven.  The first real world ‘income contingent loan” or ICL system was born. [3]

Bruce Chapman may not be the first person, economist or otherwise, who conceived of the idea that the loans to university students should be based on their future income.  Milton Friedman, in the late 1950s, had proposed the idea that a special income tax (so-called ‘graduate tax’) should be levied on these students throughout their working lives.  Nicholas Barr of the London School of Economics had written about the unique benefits of the student loan system where the repayment is based on student’s future income in the early 1980s.  But Bruce Chapman was the first economist who really sees the true nature of this ICL system in its entirety, its apparent and hidden strengths that can be further harvested, its technical and administrative weaknesses that can be avoided, its economic, political, and social ramifications on the students and other sectors in the economy, and so on.  He brilliantly combined the intellectual foundation of his labour and education economics with practical and administrative vision on how to bring out this income contingent loan scheme to reality.  His basic design is simple but not frivolous, lenient yet effective and practical, and most of all, very innovative and appealing to all concerned.  He was lucky, of course, to receive a very strong support from the popular government of the time, especially from Minister of Education by the name of John Dawkins.  Even the Australian Tax Office which refused to support the scheme when it was proposed (perhaps for fear of increased responsibilities and workloads in its tax collection) came around and has become a strong supporter (and bureaucratic beneficiary) of this ICL scheme.

So, after a very short planning period, the world’s first ICL student loan system had come into being in 1989, and only a first couple of years, the records had shown that the system was a success as the number of students enrolling under this system increased, and the first repayment actually started to be collected.  In 1992, New Zealand became the second country to adopt a similar ICL system for its university student loans.  By then, Bruce Chapman’s name and reputation became very well known, and his views and assistance were sought after by many countries around the world that want to try a new student loan system.  The World Bank had set up a special program that encouraged its member countries to explore the possibility of adopting this ICL system.  Three decades on, we have seen many countries accepted their student loan systems based on this ICL concept, such countries as Hungary, Chile, Colombia, Thailand, and the UK, with many countries in various stages of planning and preparation to switch over, such as the Philippines, Japan, South Korea, and Malaysia.  But wait until the Nobel Committee decides to award him with his well-deserved Nobel Prize in economics for his marvelous discovery of how to transform one form of economic practice to another, or to use even stronger term in atomic physics, to ‘transmute’ this important economic practice in the real world, interest in this ICL concept and practice will explode, and the whole world will change in a most significant way.

Why do I think the Nobel Committee should give him a Nobel Prize in economics?  Even from the narrow point of view of ICL scheme being a financial instrument to carry out or execute an educational or economic policy, the outcome could be considered one of the most important to long-term economic progress and prosperity of the country because we are talking about the top or the highest level of human capital promotion in the country, the attainment of university education and its contributions to the society thereof.

But what I can see from Bruce Chapman’s contributions are far greater than this narrow concept of university student loan financing.  I see a new structure for a role of the state that transcends its normally conceived provider of public goods to become a partner with individuals or the private sector in carrying out one or many certain economic functions in the society.  This new “partnership” is more than the common understanding of joint ‘public-private partnership’ (PPP) that we have seen discussed and implemented in various economic policies and cooperation because the real benefits and costs of the state and the individuals or the private sector are now shared, and the optimal trade-off between the two sides is now factored in.  As evident in the example of the HECS system (which is now slightly modified and called a new name Higher Education Loans Program or HELP), government shares the success or failure of the students vis-à-vis the benefits and costs of the tax payers through the effective subsidies to, and the repayments from, the students, using the normal state facilities like its tax system.  To me, this is a phenomenon that should be recognized as a new ‘Economic Governance’, the same way that representative democracy is a form of ‘Political Governance’, and I would like to label this new invention of Bruce Chapman as Special Public Arrangement Economics or SPA Economics.

In Bruce Chapman’s SPA economics, the following five conditions are likely to happen or take place:

  1. The state becomes a main actor or a partner with individual or the private sector in the functioning of its economic role in the overall picture of economic management. This has the beneficial effects of correcting capital market imperfections, market failures due to public goods, free-rider, and other economic externalities problems;
  2. It creates necessary and important conditions for the efficient outcome of economic efforts through consumption smoothing which reduces the cost and waste of economic instabilities brought about by shortfall and excess of income and expenditure on the part of the student borrowers or other targeted individuals;
  3. It relies on the strong and immutable role of the state (i.e. the government tax office) to be the effective instrument for collecting debt repayment, which not only efficient, timely, and less costly than done by the private sector, and which received the accolade from Joseph Stiglitz, a Nobel Laureate in economics who coined a new term ‘Transactional Efficiency’ to describe the outcome of this approach or technique (see Stiglitz 2014);
  4. It enhances the welfare of both the individual and the state in taking advantage of future returns from private efforts (in successful cases), or to reduce the future losses of both sides (in unsuccessful cases);
  5. The net overall effects should balance out the negative results of market failures and the redistributive issues in the capitalistic economic system, and the negative inefficiencies of resource allocation of socialistic economic system.

In 2006, Bruce Chapman and many of his academic supporters organized a conference that explored the possible applicability of this ICL-based SPA economics beyond the HECS/HELP systems (see Bruce Chapman 2006).   These applications include, for example, the use of the income-contingent loans for agricultural drought relief, the use of the tax system to collect fines, the use of financial incentives for criminal reparations; helping economically disadvantaged regions as well as low income households via income contingent loans; and so on.  In 2009, the Australian Journal of Labour Economics devoted its entire second issue to various academic papers on applications of income contingent loans on many economic issues and problems, for example, on the general exploration of creative applications of ICLs, on the use of ICL for mature aged training, and for extending paid parental leave (see Chapman 2009, Chapman Hunter 2009, and Chapman et al. 2009).

The above list may look varied and quite impressive, but the fact is it has hardly cover the full power of SPA economics where ICL is a major tool of implementation.  In fact , the application of SPA economics is only limited by the users’ imagination.  As mentioned above, it can be used whenever the state would like to create its special relationships with its individual citizens or groups of people.  Two large economic issues come quickly to my mind: the promotion of immigration to Australia where the costs of application can be as high as the benefits from a new life in Australia could generate for a given migrant family, but these costs could be instituted in the ICL scheme.  Or the long-term climate management, which can be very expensive for the private sector but can provide great benefits for the country as a whole in the future can be undertaken by using financial assistance based on ICL concept.

In all, it is hoped that sooner or later the Nobel Committee in Sweden will see the greatness and the power of Bruce Chapman’s contributions.  We can then look forward to the joy and the excitement that his SPA economics could bring.


Barr, Nicholas, Bruce Chapman, Lorraine Deardenc, and Susan Dynarskid (2019) “The US College Loans System: Lessons from Australia and England” Economics of Education Review, vol. 71, 2019, pp. 32-48.

Chapman, Bruce (2006a) “Income Contingent Loans for Higher Education: International Reforms”, Chapter 25 in  Hanushek, E. A., S. Machin, L. woessmann (eds) Handbook of Economics of Education, vol. 2 (2006), pp. 1435-1503.

Chapman, Bruce (2006b) Government Managing Risk: Income-Contingent Loans for Social and Economic Progress, Routledge, 2006.

Chapman, Bruce and Boyd H. Hunter (2009), “Exploring Creative Applications of Income Contingent Loans” Australian Journal of Labour Economics, vol. 12, issue 2, 1 August 2009, pp. 133-144.

Chapman, Bruce and Christopher Ryan (2002) “Income-Contingent Financing of Student Charges for Higher Education: Assessing the Australian Innovation” Centre for Economic Policy Research Discussion Paper no. 449, Research School of Social Sciences, Australian National University, May 2002.

Chapman, Bruce and Tim Higgins (2009) “Income Contingent Loan for Extended Paid Parental Leave”, Australian Journal of Labour Economics, vol. 12, issue 2, August 2009, pp. 197-216.

Chapman, Bruce, Tim Higgins and Dehne Taylor  (2009) “Income Contingent Loans for Mature Aged Training” Australian Journal of Labour Economics, vol. 12, issue 2, 1 August 2009, pp. 167-179.

Chapman, Bruce, Tim Higgins, and Joseph E. Stiglitz  (2014) Income Contingent Loans: Theory, Practice and Prospects, Palgrave Macmillan, 2014/

Stiglitz, J. E. (2014). Remarks on income contingent loans mitigating risk. In B. Chapman, T. Higgins, & J. E. Stiglitz (Eds.). Income Contingent loans: Theory, practice and prospects (pp. 29–37). New York: Palgrave McMillan. book/9781137413185

[1] Paper prepared for the conference on The ANU Income-Contingent Loan Research and Policy Contribution, organized by sted by the Research School of Economics, at the Molonglo Theatre, JG Crawford Building, 132 Lennox Crossing, Canberra, July 18, 2022.

[2] Professor of Economics, School of Development Economics, National Institute of Development Administration (NIDA), Bangkok, Thailand.

[3] Bruce Chapman has written numerous papers and books on his ICL system since its inception in 1989.  See for example, Chapman and Ryan (2002), Chapman (2006a), Chapman et al. (2014), and lately, Barr et al. 2019)



If Bruce Chapman is well known and well recognized as the chief architect of income-contingent loan system for higher education in Australia, previously known as HECS or Higher Education Contributions Scheme, now renamed HELP or Higher Education Loan Program, then few probably had known that he was also a chief brain and prime mover behind the first HECS-like system in Asia in 2006.  I am talking about Thailand Income Contingent Allowance and Loan or TICAL Scheme in which, after 3 years of preparation started in 2003, became operational in June 2006, the first country in Asia after Australia and New Zealand that had adopted this unique higher educational loan system for its tertiary students.  Unfortunately, however, TICAL had enjoyed a very short successful life, as a military coup in Thailand in September 2006 had effectively killed this young, promising scheme even before it had opened its new official permanent headquarter.  It is a sad story that I, as a co-partner of Bruce Chapman in creating this ICL scheme for Thailand, would like to share with you in this important event commemorating the retirement of Bruce Chapman from the Australian National University.

By 2003, Bruce was already well known among university administrators throughout the world for the success of his HECS system in Australia which began in 1989.  He was invited to explain his system in many countries in all continents.  The World Bank had even set up a special program that encouraged its member countries to consider adopting, or at least investigating, the ICL-based, student loan scheme for their higher education, and engaged Bruce in his presentation and advice in various countries.  Bruce performed his role vigorously and tirelessly, travelling from one country to another in quick succession, every year.  But I must say that while Bruce’s involvements in the discussions and establishments of ICL systems in most countries are purely professional and business-like, his involvement in the Thai ICL system is very personal, even emotional and spiritual.  Why is this so?  Why is his role in Thailand so special?

It all began in late 1990 when I was hired as a senior research fellow at the Department of Economics of the Research School of Pacific Studies (RSPacS), which was later changed its name to Research School of Pacific and Asian Studies (RSPAS), and yet again to the Arndt-Corden Department of Economics of the Crawford School of Public Policy.  At that time I was a lecturer at the Faculty of Economics at Thammasat University in Bangkok, Thailand, and had received official permission for a leave of absence for up to four years to work at this famous regional research school at the ANU.  Although Bruce, who was at that time also a researcher at the Research School of Social Sciences (RSSS), and I shared the same sprawling Coombs Building, I did not know him then.  But of course his reputation as the creator of HECS was already widespread among Coombs’ occupants, myself included.  When I learned about the success of Bruce’s HECS system, I felt like I was struck by a bolt of lightning, because this was something of a policy tool that I was looking for all of my life up to that time, to be used to solve the intractable problems of higher education financing in Thailand.  And the genius who conceived and pulled off this extraordinary feat of a policy implementation sat in his office just a few steps from my office, around the corner of the same building!  When my research contract with the ANU expired in early 1994, and I had to return to Thammasat University in Thailand, I decided that I could not leave without talking to Bruce Chapman and learning directly from him about the HECS system.  So, I walked over to his office to introduce myself and tried to make an appointment.

But in the early 1994, Bruce Chapman no longer worked at the RSSS.  He was seconded from the ANU to work as an economic advisor to Paul Keating, the Prime Minster of Australia at that time, and his new office was located at the Executive Section at the Parliament House.  So, I called him on the phone and was able to make an appointment to come to see him at his office.  I met Bruce Chapman for the first time in his Parliament House office in May 1994 before I returned to Thailand.  Bruce probably did not remember or recall this meeting, because he met many new people like this all the time, but, for me, this was the beginning of a new important endeavor and, as Humphrey Bogart would say, I think this is the beginning of a beautiful friendship.

I came back to Thailand in mid-1994 when the country was at the height of its economic expansion, ready to become “the Fifth Tiger of East Asia”.  But the situations surrounding its higher education system were as stagnant and problematic as ever.  The university system at that time was characterized by the existence of few “closed access” state universities where admission is restricted by tough general or country-wide entrance examinations.  As such, most students who could get in normally came from well-established or well-off families who could go to good schools and had good entrance exam preparations.  The huge bulk of those poorer or less well-prepared students who could not get in but still wanted to study at the tertiary level had to be content with going to two huge |”open universities where no entrance exam is required, but where the quality and the level of attention given to these students were much less.  Or they could go few private universities which charge much higher fees.  Another critical feature in the closed university system was that it was highly subsidized by the government.  It was estimated that, in 1994, the overall share of admitted students via their tuition fees to the total costs of university operation was less than 10 per cent.  There was no way that these state universities could attain higher level of autonomy and excellence unless they could offer higher salaries to their professors and be more aggressive and innovative in their research efforts by increasing the share of university costs from the students.  But any attempts to increase tuition fees was always met with student protest such that no government would dare to do this.

That was why I thought that the Bruce’s ICL system could work wonder in the Thai situation, by the state taking care of the increased costs on the part of the students who would pay them back in the future when their incomes were high enough.  Both quantity and quality of higher education were likely to increase.  Therefore, from the end of 1994 to early 1995, I started to ask around and talk to administrators and political leaders who could provide support or bring about this policy change based on this Australian ICL concept.  But no one seemed to be interested.  Even contrary to this, the government under the control of the Democrat Party managed to pass a law, so-called the Student Loan Fund Act or SLF Act that set up fund for student loans at university level which is a typical mortgage-type student loan plan, the very plan that Bruce’s ICL system was designed to replace in order to correct its inherent credit shortage and income inequality problems.  This SLF scheme would later cause enormous administrative and judicial problems for Thailand that are still unresolved today.

You can imagine the frustration that I had when no one seemed interested in this ICL system.  In mid-1995, the presidency of Thammasat University, my University, became vacant, and I was the only brave soul who was asked to stand against a former popular President who wanted to come back for the second term.  I was so worked up with ICL idea then and saw this as an opportunity to introduce or make known this system without thinking about my possibility of winning.  I said to myself then, do it if no one would run the ICL system at the national level, then I would do it in just one university, that is, if I won the appointment as the new president.  So, I put the ICL idea as one of my major policy platforms for Thammasat University.  Unfortunately, despite my winning votes among the university teaching staff, I did not get enough support from the supporting staff and the students, and lost out on the final University Council’s decision.  With my failure to win the appointment, my attempt to push ICL at Thammasat and elsewhere died with it.

For almost 8 years, that is from 1995 to early 2003, my academic interest had totally shifted to another area away from higher education financing.  At the time of my contest for the presidency, I was already appointed Director of the Institute of East Asian Studies at Thammasat University with our research focus on China, Japan, and Korea.  I was also heavily involved in the APEC Study Center Consortium and the administration of overall APEC agenda throughout these periods, ending with the hosting of APEC Summit in Thailand in 2003.  Thailand in 2003 was run by the government headed by the famous Mr. Thaksin Shinawatra whose political party won majority of votes in a general election in 2001. Mr. Thaksin became very popular for his generous populist policies such as universal health care system, village fund micro finance program, and farmers’ debt moratorium scheme.  His government was also interested in higher education reform, and a large committee was set up in 2002 headed by one of his deputy prime ministers by the name of Chaturon Chaisaeng.  Mr. Chaturon whose role would become very important later in the student loan system that Bruce and I played a large part was a young politician with background training in medical science and later in economics in the US, was very perceptive and intellectually capable politician but his committee could not help him find a solution to the student fee problems.  Until in early 2003, someone in his committee suggested to him that I had some knowledge of the successful student loan program in Australia, and should be invited to meet with the committee.

In February 2003, I was invited to meet with Mr. Chaturon and his committee at the Rose Garden Hotel in Sam Pran.  Unlike my negative experience in 1994 and 1995, this time, it clicked.  Mr. Chaturon was immediately receptive to the ICL idea, and most committee members agreed that the student fee increase would not be possible without government’s active participation through a serious and comprehensive income-contingent loan system.  I was asked to join in as a new member to the higher education financing reform committee, and many subcommittees were reorganized to study the new system.  Despite my initial success of winning over the general acceptance of the ICL concept this time, I knew that the actual, real-world, success of this new system would not be possible without the leadership of someone more experienced and more persuasive than myself, and that someone is none other than Bruce Chapman himself.

So, with the general agreement with the committee members, I flew to Canberra in March 2003 to have a preliminary talk with Bruce at his RSSS office at Coombs.  This was the second time that I met Bruce Chapman since 1994.  And like the first time, Bruce was very helpful and generous with his time, and gave positive response to a future assistance to the ICL planning in Thailand.  During this trip, I also had a chance to meet with the officials of the Department of Education and the Australian Taxation Office who were responsible for the running of the Australian HECS system.  At the time of my visit, the Higher Education Financing  Committee (HEFC) in Thailand had already approved my short research project to study the feasibility of the HECS-like system for Thailand, and a few months later a couple of researchers in my team also visited these officials to learn, in more details, the day-to-day operation of HECS.

The right time to invite Bruce Chapman to visit Thailand came in October 2003.  We had completed our research on the feasibility of adopting the ICL scheme in Thailand, and we had some idea what it was, but we needed to hear it from the man who created this system himself, to give us confidence that this was a good system and would work if basic conditions were met.  Bruce was then travelling with the World Bank’s support in Mexico and Germany, and was flying back to Australia.  So, we simply provided him with an additional stop in Bangkok and a few days stay.  The first meeting of Bruce Chapman with Mr. Chaturon and HEFC members was both critical and memorable.  Bruce began in his soft and measured voice, started with the necessity and benefits to the society of increased education beyond the secondary level, as evidenced in his now familiar age-earning profile diagram.  He then pointed out how the market failed to provide necessary credits, on the supply side, due to the risks and uncertainties on the students’ success and future income, as well as the unwillingness to take risks, on the demand side, by the students themselves.  And the repayment which is tied in with current income and its unexpected fluctuations (through unemployment, illness, other emergencies, and so on) provides necessary consumption smoothing function and cushion against debt default.  The interest-free but price-indexed debt would be effectively and efficiently collected via official income tax system, obviating any need for special collecting agencies and protocols.  It was obvious at the end that the audience was enthralled and mesmerized by Bruce’s presentation.  The road to new higher education financing in Thailand had opened.

From here onwards, Bruce Chapman was in constant touch with our HEFC.  Another milestone was passed in April 7, 2004 when the Thai cabinet met to consider the approval of the official proposal from the National Educational Council and the Bureau of University Affairs to change the higher educational financing system from the SLF to the new TICAL Scheme.  The cabinet passed its resolution in less than 15 minutes with the Prime Minister, Mr. Thaksin Shinawatra, actively helping me presenting this proposal to the cabinet!  We now had the green light from the country’s policy makers, and a handsome preparatory budget to boot.  With this cabinet approval, and the availability of preparatory funding, I knew that it would be a matter of time before our TICAL could be brought to fruition.  I am reminded of a similarity between our experience and the experience in Australia.  Bruce’s success could be attributable to a strong political support from a respected and powerful politician like Mr. John Dawkins, the Minister of Education, Science and Training (DEST), and, needless to say, from Mr. Paul Keating, the Treasurer, and Mr. Bob Hawke, the Prime Minister as well.  In the Thai case, it was the strong support of respected and powerful politician like Mr. Chaturon Chaisaeng, who had the full backing of Mr. Thaksin, the Thai Prime Minister himself.  This should prove a rule that to have a successful new innovative program like HECS or TICAL in any country setting, a strong, continuous political interest and support is a sine qua non for its successful outcome.

Picture 1: Briefing to the Thai Delegation at the ANU, July 1, 2004.

Picture 2: After lunch at the University House by Professor Ian Chubb, Vice-Chancellor of the ANU, July 1, 2004.

Picture 3: A dinner for Bruce Chapman during his many visits to Thailand from 2003 to 2006

As part of this preparation, a delegation of almost 20 members of the people who would run this TICAL Scheme in the near future led by the Deputy Prime Minister, Mr. Chaturon himself visited Canberra in early July 2004, to meet with Bruce Chapman again, the Vice Chancellor of the ANU and other officials of the Australian university systems, and to observe HECS in its actual operation.  From here on, Bruce had visited Thailand many times in 2004 and 2005, each time learning about new progresses in preparation and commenting on possible dangers and possible ways to solve or counter potential problems.  By the end of 2005, everything was ready for the launch of this new TICAL Scheme scheduled for February 2006, for the start of the actual operation of the new school year in June 2006.

For me, at least, his should be an occasion for a big celebration.  I had spent 3 years working with Bruce Chapman and other Thai colleagues on various issues to pull this scheme through.  At the end I was not even at the launching ceremony at the Thai Government House, and the previous plan of inviting Bruce Chapman to come to meet with the Prime Minister at this launch was scuttled.  Why?  The answer lies in Mr. Thaksin’s behaviour.  In the previous five years that he was in power, Mr. Thaksin had carried out many useful and popular policies such as his universal health care scheme and, of course, his support for TICAL, but at the same time, he had also committed several abuses of power, involved in many conflict-of-interest decisions, and violated many rules of good governance or simply broke the country’s laws or used them to his benefits.  The last straw that broke his legitimacy as the country’s leader came in January 2006, when he sold his entire holding of shares in his telecommunications company to a state company in Singapore for about 73 billion baht or about 2 billion US dollars without having to pay a single baht of tax, exploiting a loophole in the Thai tax system that he should have closed when he had the power to do so.  This was too much for the country to accept, and Thailand had plunged into political turmoil.  A new election was called but the problems were not solved.  It was regrettable that we had to distance ourselves from him.  The country had verged on being ungovernable, when the Thai military decided to stage a coup while Mr. Thaksin travelled to the US to speak at the UN General mid-September 2006.

In fact, this event should not have any bearing upon the TICAL Scheme as it was well accepted.    In the previous 3 years, it had gone through various “public hearings” to make sure that a consensus was reached before its actual implementation.  In short, TICAL should be allowed to go on by the new government like the continuation of the universal health care program.  But this was not to be the case.  Again, why?  The new military-backed Interim Prime Minister had picked, out of all able people in Thailand, a former head of the Bureau of University Affairs as his new Minister of Education.  What’s about him?  Horror upon horror, he happened to be the one top bureaucrat who helped the Democrat Party design and implement the SLF Program in 1995, the program that TICAL was supposed to replace in 2006!  So, instead of the SLF being condemned to death, the reverse had happened.  It was TICAL that, eventually, had been strangled to death by this new Minister of Education.  The SLF was saved and, as will be shown later, continues to cause extensive damages to the student loan financing system in Thailand today.

Two questions immediately sprang up.  One, why did I, or my fellow HEFC committee members not come out to protest and rally for the continuation of the TICAL Scheme?  Two, why the Thaksin-backed party which came back to power about two years late in 2008 not revive or bring TICAL back to its original state?  The answer to the first question was that after the coup, I was appointed a commissioner in the National Anti-Corruption Commission (NACC) which prevented me to do anything else outside a very strict confine of my new role and responsibilities.  Moreover, most of my HEFC colleagues seemed to lose interest in fighting for TICAL, especially in the immediate aftermath of Mr. Thaksin’s removal.  On the second question, the new Thaksin-backed government did not have anyone who understood the full mechanisms of TICAL, and it also continued to face debilitating political protests in Bangkok, so much that it had little time to do anything else.  At the end of 2009, the Democrat Party, the creator of the SLF, was able to form a new government after the demise of Thaksin-backed party, putting an end to any prospect of the revival of TICAL.  True, the Thaksin-backed party won another election in 2011, but it focused more on its much bigger populist policy, the Rice Pledging Program to pay any attention of TICAL.

Meanwhile, the SLF continued to wreak havoc to the student loan system.  It’s bad design which required the indebted students to start paying back two years after graduation or after the curtailment of the loans was too short for most indebted students to earn enough salaries or income to start their paying back and were likely to fall into a debt-default situation.  A strange system that asked the student debtors to pay a portion of their debts to a designated government bank only once a year caused many to ignore their repayment altogether.  But while the interest charge to the loan was only 1 per cent per year, the interest charge for the non-payment of past due was 7.5 per cent per year.  It was not a surprise that after many years in the debt-default state, the amount of fine could be 3 or 4 times higher than the principal debt.  And in order not to allow the indebtedness to lapse into debt-free status within 5 years according to the current provision in the Civil Code, the SLF Office had to sue each defaulted student in the civil courts.  Little wonder, it is probably true that the more than one million cases in the civil court systems in Thailand today represent the highest number of student loan default cases in the world.

In May 2014, the Thai military again seized power in a coup to form a dictatorial government.  But even with this summary power in hand, the military leaders did not know how to use this power to manage the student loan problems.  What it has done was to allow the military-backed legislative assembly to pass a couple of new SLF laws that give more power to the SLF Committee to tweak the repayment systems that make it easier for the indebted students to pay for their debts, and to reduce the punishing effects of fines.  But no one has mentioned about the throwing away or the revamping of the SLF, and the resurrection of the effective and efficient TICAL Scheme.

Although Bruce Chapman is retiring from his official duties at the ANU, I am quite sure his good will towards Thailand is still unchanged.  Perhaps, he could, and should be persuaded to return to Thailand, to form another team of people to help bring about the revival of TICAL, like a phoenix that rises up from the ashes and ruin of a fire.

Medhi Krongkaew

18 July 2022


[1] Paper prepared for the conference on The ANU Income-Contingent Loan Research and Policy Contribution, a conference organised by the Research School of Economics, at the Molonglo Theatre, JG Crawford Building, 132 Lennox Crossing, Canberra, July 18, 2022.

[2] Professor of Economics, School of Development Economics, National Institute of Development Administration (NIDA), Bangkok, Thailand.

* Background paper for the first meeting of the Technical Subcommittee (the Second Subcommittee) at the Students Loan Program Office on Friday July 30, 2004.

** Chair of the Second Subcommittee.

[3] Dr. Suchittra Chamnivickorn and Dr. Prasopchok Mongsawad of the School of Development Economics, NIDA.

[4] This scheme is now also referred to as the Thailand’s Income Contingent and Allowance Loan Scheme, or the TICAL Scheme for short.  Tical is the old English word that was used to describe the monetary unit of Thailand, the baht.