PTPTN's solution to overlapping loans is working

KUALA LUMPUR: As many as 284,210 blacklisted borrowers are benefiting from the National Higher Education Fund Corporation (PTPTN)'s new facility to solve the issue of overlapping loans.

Higher Education Minister Datuk Seri Idris Jusoh (pic) said the improved system has allowed students with two separate PTPTN loans to clear any bad credit record.

Idris said that students who have two overlapping loans taken for diploma and degree studies respectively would have both outstanding amounts combined into one lump sum.

"Students only need make payment after six months after completion of their studies. Therefore, they will not face any problems with financial institutions, the Immigration Department, or action based on any laws," he told Datuk Dr Noor Azmi Ghazali (BN-Bagan Serai) during Minister's Question Time in Parliament on Tuesday.

Dr Noor Azmi had asked the ministry to state measures taken to deal with the issue of loans taken during the diploma level, which overlapped with other loans taken for degree studies.

"It is carried out in two phases, beginning April 6 last year, where new loans will be approved for those with current loans by merging them (the two loans)," said Idris.

"In the second phase beginning early this month, the merging facility will be carried out automatically," he said.

According to Idris, PTPTN had given loans to more than 2.71 million students nationwide and collected repayments worth RM3.4bil last year.

"We are confident with the new facility and positive changes in our approach, we will be able to collect repayment worth up to RM4bil this year," he said.

On PTPTN's National Education Scheme (SSPN), Idris said that it had received overwhelming support with more than three million account holders with deposits worth RM2.846mil.

"This is because it gives a special dividend of between 3% to 4.25%, compared to normal banks that only give (interest of) about 1.5%.

"We hope more will come forward to join the scheme," he said.