PETALING JAYA: Many who get study loans from the National Higher Education Fund Corporation (PTPTN) believe they can get away with not repaying their loans.
This mentality that it is “not a real debt” has to change and the borrowers need to be educated to be responsible, said the National Association of Private Educational Institutions.
Its president Assoc Prof Elajsolan Mohan said the fund must revise its strategies to collect the loans.
“The loan recovery process by financial institutions is successful. Employers can deduct salaries and directly remit to PTPTN, similar to what is done for the Employees Provident Fund.”
Elajsolan was commenting on the Auditor-General’s Report series 1/2025, which found that the fund was owed RM10.853bil by 1.2 million defaulters in 2023.
Elajsolan urged university students to be responsible and emphasised the importance of learning how to manage their finances once they start working.
“Paying back the loans will help other needy students pursue their dreams,” he added.
Repaying the debt should always be the priority ahead of other expenditures such as buying non-essential items, the Financial Industry Collective Outreach chief executive officer Clare Walker said.
“Firstly, students should understand the interest charged in order to calculate the real cost of the loan over the repayment period,” she said, adding that the balance of any PTPTN amount remaining at graduation should be used to pay off part of the loan.
Good planning and discipline, she said, are critical when considering to take on any loan or potential debt, including PTPTN.
She advised fresh graduates to create a monthly budget and track their expenses.
“When they have a pay rise, bonus or spare cash, they should try to increase payment amounts or make additional repayments to clear the loan more quickly,” she said.
On avoiding common mistakes, Walker cautioned fresh graduates against the misconception that PTPTN is not a “real debt” and doesn’t need to be repaid like other loans.
Defaulting on PTPTN repayments, she said, can lead to a poor credit score and other potential restrictions imposed on defaulters.
“Erratic payments can also lead to an accumulation of debt which can cause a lot of stress,” she said.
She added that borrowers can consider requesting auto-deductions from salaries to avoid missing payments or approaching PTPTN or any other credit counselling agency, such as the Credit Counselling and Debt Management Agency (AKPK), if they are finding it difficult to manage their debts.
Walker also said borrowers could take on jobs during their holidays or work part-time to supplement their loans to ensure they do not struggle with repayments after graduation.
“This not only reduces future debt but will also build up their skills and enhance their CV,” she said, adding that students should also aim high in their studies and apply for an exemption on PTPTN repayment if they are eligible to convert it to a scholarship.
Higher Education Minister Datuk Seri Dr Zambry Abd Kadir said he will issue an official announcement on the matter.
“As I have said before, the collection of PTPTN loan repayments needs to continue,” he said after delivering the keynote address at the Asean Universities Exhibition and Forum 2025 here yesterday.
