PETALING JAYA: The proposed travel ban on National Higher Education Fund Corporation (PTPTN) loan defaulters has sparked calls for stronger financial education to help graduates better manage their debts.
Borrowers said the move, which targets those with arrears exceeding five years while earning more than RM6,000 a month, or working overseas, should be accompanied by efforts to improve financial literacy.
Teacher Michael Ch’ng, in his 30s, believes that many repayment issues stem from a lack of financial understanding among students.
“Most students don’t understand the concept of repayment or how defaulting affects their Central Credit Reference Information System (CCRIS) score,” he said.
“Many don’t even know what a credit score is, or how it impacts their ability to get loans later in life.”
Ch’ng, who graduated in 2019, said financial hardship was his main barrier to repayment.
“When Covid-19 hit in 2020, I decided to further my studies and assumed I didn’t need to repay my PTPTN while studying, but I was wrong,” he said.
“Since I was only working part-time, I couldn’t afford monthly payments. It was only after I regained financial stability that I started paying back my loan.”
He added that the consequences of non-payment became clear when he applied for a credit card in 2023.
“If you don’t pay PTPTN consistently, your CCRIS and Credit Tip-Off Service records are affected, lowering your score and making it harder to get loans,” he said.
For Anita, a 24-year-old executive from Cheras, automation helps her stay on track in repayment.
“I don’t feel the struggle because I pay RM150 on the first day of every month through the myPTPTN app. It’s auto-debited from my salary,” she said.
Anita agreed that financial literacy remains low among young Malaysians.
“We’re not taught in college how to manage our finances or settle loans properly,” she said.
Anita added that while most working adults could afford the minimum payment, PTPTN should still offer more flexible options for those facing difficulties.
On Oct 26, PTPTN chairman Datuk Seri Norliza Abdul Rahim revealed that about 30% of the 1.2 million loan defaulters were found to be able to afford overseas holidays.
She said this was discovered through data matching with several agencies.
As of Aug 31, PTPTN loan arrears stood at RM11.18bil, including RM5.25bil owed by 359,000 borrowers who have never made a single repayment.
