New plan to repay study loans

NATIONAL Higher Education Fund Corporation (PTPTN) defaulters must come up with a repayment schedule by year end.

Should they fail to do so by Dec 31, they will be listed in the Central Credit Reference Information System (CCRIS) from Jan 1 next year, which will affect their credit record.

PTPTN chairman Datuk Shamsul Anuar Nasarah said the first stage would affect the 173,985 borrowers who had not started financing their loans, three years from the date they graduated.

“It will be done in stages and the remaining loan defaulters will be added in the next stage (of the exercise),” he told a press conference on the corporation’s new payment and repayment policies on Wednesday.

Shamsul Anuar emphasised that CCRIS was a system that collected a borrower’s credit information and used to determine one’s credit history.

“It is not a blacklisting system,” he pointed out.

He said this was being done to instil discipline in the borrowers as a good CCRIS report would help one obtain new loans.

“Their failure in maintaining a good and consistent credit record will affect their credit worthiness,” he said.

Shamsul Anuar said defaulters could choose between three payment options – pay the lump sum and get a 20% discount, restructure their loans and settle it over 12 months by Dec 31, 2015 to obtain a 10% rebate, or restructure their loan instalment to be paid in not more than 60 years.

Shamsul Anuar said that as of Sept 30, the corporation had approved RM48.36bil in study loans to 2.1mil borrowers.

“Based on current repayment trends, PTPTN needs to allocate RM5bil every year to cover the tuition fees and living costs of students from both private and public institutions of higher learning,” he added.

“Besides that, PTPTN has to set aside an allocation to repay the financial institutions,” he said, adding that PTPTN obtained its funding by borrowing from financial institutions, guaranteed by the government.

“We have taken many measures to increase the amount being recollected but they have not been effective,” he said.

Among the steps taken so far were the opening of 25 PTPTN branches nationwide, providing different repayment channels, providing discounts and rebates to those who pay a lump sum or pay consistently, and carrying out awareness campaigns.

“PTPTN has also taken proactive steps to ease the borrower’s financial burden,” he said, adding that despite these measures, there were still borrowers who failed to pay back their study loans.

Due to the low number of people repaying their study loans, Shamsul Anuar said the corporation would face financial constraints when providing new loans and repaying the loans taken from financial institutions.

“Indirectly, this will cause a drop in the number of students who could benefit from loans,” he added.

On a separate matter, Shamsul Anuar said PTPTN was forced to reduce the loans by 5% for new borrowers from public universities and 15% for those in private higher education institutions.

However, he said, students pursuing a bachelor's degree in medicine in private higher education institutions would still receive the same amount of financing.

“This cost-saving method is to ensure future students who require PTPTN loans can still benefit from it,” he said.

Shamsul Anuar pointed out that PTPTN had no other option, unless it reduced the number of students receiving the loans instead of dropping the actual loan amount.

The reason, he added, behind using the 1Malaysia People's Aid (BR1M) data as a vetting system was because the data was more accurate as it had been screened by various government agencies.

“Based on a data comparison between our borrowers and BR1M recipients, only 51% are eligible for maximum financing, compared to 90% using the old vetting system,” he explained.

He added that maximum financing would be given to borrowers whose parents were listed as BR1M recipients or are BR1M recipients themselves.

Also, households with a monthly income of less than RM8,000 qualify for 75% of the maximum financing while those with more than RM8,000 qualify for 50% of the maximum amount.

He hoped that with these measures, PTPTN would be able to rebuild and re-stabilise their funds in order to return to their previous financing rates.

Prime Minister Datuk Seri Najib Tun Razak, when tabling Budget 2015 last month, said borrowers could expect a 20% discount if they repaid their loans in full by March 31, while borrowers who made continuous payments for 12 months till Dec 31, 2015 would be entitled to a 10% discount.