Education fund needs more clout to get defaulters to repay loans


  • Letters
  • Friday, 21 Nov 2003

By V.K. CHIN

IT IS difficult to understand the irresponsible attitude displayed by many borrowers of the National Higher Education Fund Loan who refuse to repay such loans after graduation. 

Too many of them have failed to meet this legal obligation even though they have started work and the fact that the Fund has made it as easy for them as possible to do so. 

Deputy Education Minister Datuk Hon Choon Kim said on Wednesday that only RM33mil in loans, out of RM153mil due, has been repaid. The Fund was started in 1997. 

Just what are these people trying to prove? Are they trying to show that they can defy the Government and get away with it? This is a challenge that the Government cannot leave well alone. 

The Fund has a duty to recover the loans from the borrowers as the money is from the Government to enable as many of the school leavers as possible to further their tertiary education. 

This is a very noble aim and billions of ringgit has been set aside for this purpose because the Government and the people realise the importance of education in the nation's development. 

As scholarships have proven to be less effective as some scholars did not seem to appreciate this generous gesture, it was thought that a better way would be to convert this into a loan scheme instead. 

The difference between a scholarship and a loan scheme is that the former beneficiaries do not have to reimburse what the Government had spent on their education. 

Instead, they are required to serve the Government on completion of their studies and if they should refuse to do so, then only would they need to pay back the amount spent on their education. 

The Government can also release its scholars without any condition especially if it does not have sufficient jobs to accommodate the new graduates. With so many scholars, it is impossible for the Government to employ all of them. 

A loan scheme was thought to be a better option, as there is no obligation on the part of the Government to provide borrowers with employment. At the same time, the borrowers will need to repay the loans, which could be used to help other needy students. 

It may be necessary for the Fund to be given the power to get the employers of the defaulters to deduct an amount from their monthly salaries as repayments. 

With the help of the Employees Provident Fund or the Inland Revenue Board, it would not be difficult for the lenders to trace the whereabouts of the defaulters and force them to meet their financial commitments. 

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