Educational Inequality and the Fiscal Policy to Empower Poor Student

Abstract

This paper takes a case study of unequal opportunity in tertiary education between the rich and the poor and articulates for policy adjustment in Thailand’s student loan program. Our model assumes that parents
are in general altruistic toward their children and they are willing to invest in children education, yet, their capabilities to invest vary considerably. As the consequence
the chance of tertiary education is very limited for poor children; they enter labor
market while young age in the lowly paid occupations, without decent welfare, and
earn low income over lifetime. We use the National Statistical Office’s household
survey to analyze educational attainment of two generations, i.e., parents and children, and specifically estimate the relationship between education attainment and class selection. Our findings indicate that only 1 percent of children of low income household obtained bachelor degrees, compared to 11 percent the national average and 35 percent for the high income group. Regarding policy implication, we articulate for policy adjustment in the state operated student loan program. The fund is intended
to allocate loan for poor families—yet, in reality, the target for reaching poor
student is questionable. Our proposal recommends a new way of allocating student loan, specifically, (i) a new branch of an area-based screening (approxi-
mately 1,000 units in total) committee to select children (18-22 year old) from poor

families with decent school performance; (ii) the selected students are entitled to
borrow money for tuition fee and to receive free-of-obligation grant for monthly
stipend; iii) the centralized monitoring system be established to monitor the area-based targeting errors and to recommend operational changes in the course of development. The estimated fiscal cost of granting will be 2,387 million baht in four year span. These may serve as useful information for educational policy maker.