WE are not the main loan regulating body, PTPK chairman K. Saraswathy said.
Many students in private training providers are led to believe that PTPK is responsible for providing them with financial aid to pursue their studies.
Correcting this misperception, Saraswathy said it is not the only agency that provides financial assistance to TVET students.
“We are just another avenue.
“We only provide loans to students enrolled in skilled training centres registered under the Human Resources Ministry’s Department of Skills Development (JPK).”
When PTPK was established under JPK, it was set up to provide financial aid for students enrolled in public institutes under the Manpower Department and Industrial Training Institutes which run diploma programmes.
“This funding mechanism was only allocated for institutes under the Human Resources Ministry because courses in the eight other ministries were free.
“However, six months after the Cabinet’s approval, the government reviewed PTPK and decided to open the funding to private entities, ” he added.
While there are other agencies that provide student loans to private training providers, Saraswathy said PTPK has become the preferred organisation to disburse loans.
“We have a fee structure for each programme and this has become a reference for other agencies when they give out financial assistance.
“So it looks as if PTPK leads the loan funding for skilled training and therefore the misperception.”
It is estimated that more than 70% of applicants who apply for their financial assistance are students from B40 (low-income) families.
While less than 50% of registered private training providers rely on funds from PTPK, StarEdu has learned that a number of providers have based their business model purely on students receiving PTPK loans.
“Our data shows that the number of training providers registered with us have dropped from 410 in 2018 to 367 this year, ” Saraswathy said.
“When we reviewed the allocation criteria, we found that the problem is with the training providers.
“If you rely fully on us, how can your centre operate well? As private training institutes, they are supposed to look at different perspectives or approaches.”
However, she notes that there are hiccups to the system that needs to be looked into.
“We have criteria to ensure the allocation benefits the students. Due to the limited budget we have, we enforced new criteria this year such as employability assurance where training providers must collaborate with the industry on job vacancies that suit their training, ” she said.
“It could be a contributing factor to some training providers saying they’re receiving less allocation - it’s probably because they’re not ready for this approach.
“We are aware of this and are currently doing studies to ensure the allocation can be given to specific programmes and/or industries, and to prioritise the government’s directive.
“Yes, we must give assistance to enterprises to grow (but) it’s not fair for the government to (be responsible for their) funding.”
A clear cut funding mechanism for the private TVET sector is needed
Every year, an allocation of 80% from PTPK’s budget is given to private training providers while only 20% is for public institutes, Saraswathy said.
While the industry has its issues, she does not believe the private sector is ‘broken’.
“You need to look at it from the business perspective. Survival of a training institute is based on the number of students who enrol, ” she added.
However, enrolling students with false expectations that they will receive PTPK loans, causing them to be in debt and subsequently not finish their course is a serious issue, she said.
“There should be one main governing body to overlook funding mechanisms for private TVET institutions, ” she said.
“If the funding mechanism is clear, everyone will replicate it.”
“We currently receive RM200mil a year. If we receive (the desirable) budget, we are ready to take on the challenge of providing loans to every student who applies.
“We will also be comfortable enough to eliminate the quota system and be able to distribute allocation from the start of the year itself. Training providers normally receive their allocation by March, ” she added.
However, she described the situation as a catch-22 because an increase in budget could mean an increase in training providers registering with the corporation for loans.
Federation of JPK Accredited Centres (FeMAC) president P. Sailanathan said that many private training providers are genuine and struggle to make ends meet.
FeMAC is an association comprising members who are accredited private TVET training providers.
According to Sailanathan, the association has more than 350 registered members.
Some centres enrol students and inform them that their loans are subject to approval, he said.
He, however, urged PTPK to give private training providers more time to apply for the allocation quotas.
“I’m not disputing their allegations but the constraint is on our side and within a limited time, we have to do the necessary enrolment, marketing and registration.
“This is a problem we are facing right now, ” he added.
“Since 2016, PTPK’s fund size has reduced to RM200mil while the number of colleges have increased, ” he added.
Sailanathan said Femac’s contention is the lack of money to assist students who want to study.
“We are not blaming anyone as we know that PTPK can only give what is available to them. We are asking for an increase in the size of the fund.
“For Budget 2020, we submitted a proposal to the Finance Ministry for RM1bil for PTPK, ” Sailanathan said.
Human Resources Minister M. Kulasegaran said students should first check if the training provider and the course they are interested in is registered.
“Students must be more discerning while applying for courses and do some basic research online to see the trends of courses that they are interested in, ” he said, adding that centres give a rosy picture of courses.
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