Parent groups say system is being abused by high-income borrowers
PETALING JAYA: Drastic action should be taken against National Higher Education Fund Corporation (PTPTN) defaulters, particularly those in the higher income bracket, say parent groups.
Melaka Action Group for Parents in Education chairman Mak Chee Kin said there are a variety of PTPTN borrowers, with some having steady jobs and able to travel overseas.
“We have read that many (defaulters) are in this category, high-ranking government officers and corporate executives are involved too.
“They are the main culprits who collapsed the good and noble intention of the government,” he said yesterday.
Mak suggested a travel ban be imposed on the defaulters.
On Friday, Prime Minister Datuk Seri Anwar Ibrahim announced that the government is considering reviewing loan rates and debt repayment terms to better assist borrowers, while addressing the issue of high debts.
The Higher Education Ministry said to date, PTPTN’s outstanding loans stand at RM40bil, with RM11bil classified as overdue.
Parent Action Group for Education chairman Datin Noor Azimah Abdul Rahim recommended several measures for the government to deal with the issue.
“The government can deduct (the monthly repayment) straight from the salary, initiating legal action or publicising irresponsible borrowers’ names.
“It can also consider hauling them up to agree to a more lenient repayment scheme with an ultimatum or deduct from the Employees Provident Fund,” she said.
National Union of the Teaching Profession secretary-general Fouzi Singon said the issue of loan arrears is multifaceted.
“In the early stages, there might be a lack of stringent assessment, resulting in loans being granted without adequate consideration of the institution’s credibility or the marketability of the programmes offered.
“Many students were enrolled in private colleges that charged high fees but did not equip them with the necessary skills or qualifications for gainful employment.
“In some cases, students did not complete their courses, or the programmes taken had limited relevance in the job market,” he said.
Economist Geoffrey Williams said the government should look for more sustainable ways to help students.
“In 2014, loan amounts were cut because PTPTN could not afford them. In 2019, a report by PTPTN showed that the loan system is unsustainable because of low repayments mainly due to the low income of graduates.
“Now, more than five years have passed with no reforms under previous governments, the unity government has inherited the same structural and unsustainable problem,” he said.
“The best solution is to stop issuing loans to new students and instead give them an allowance to pay for their preferred course.
“There are currently around 600,000 Malaysian bachelor degree students.
“A grant of RM10,000 each would cost the government RM6bil. There is already a subsidy of PTPTN of around RM2bil per year to pay finance costs.
“So the difference is only RM4bil, more than half of which is already paid by the government to pay public student fees. So actually the net cost would be less than RM2bil,” he explained.
For students with existing loans, he said repayment terms can be devised by taking it out of the higher education system and dealing with it separately.
“Alternatively, those with outstanding loans can repay through a small graduate tax on their income each month.”
