It is an undisputed universal law that all things borrowed must be returned. Strangely when it comes to student loans in Malaysia, we are not keen on making the repayment.
According to a report by The Star today (May 24), National Higher Education Fund Corporation (PTPTN) revealed that future local students will not be able to receive loans from the government if the current trends continue.
Citing to its statistics, the corporation’s Public Consultation Independent Advisory Panel said financially struggling Malaysian students may have to seek for alternative scholarships or financial aids if they wish to pursue tertiary education.
“The total number of students requiring loans from PTPTN is on an upward trend and is expected to grow from 180,000 today to 250,000 by 2040,” the panel’s chairman Sheikh Shahruddin Sheikh Salim said at Universiti Malaya yesterday (May 23).
Sheikh Shahruddin explained that while PTPTN borrowers may feel like they are currently the biggest victim of the work-in-progress repayment policies, future students should also voice out their opinion on the issue as it will affect them in the future as well.
Describing the issue as being of “national importance”, he said: “Given that PTPTN’s RM40bil debt has considerable financial implications for the nation and taxpayers, we urge Malaysians to review the 10 big ideas and weigh in with their opinions.
“The future of higher education funding affects every Malaysian. While current borrowers may feel that they are the biggest group affected by PTPTN’s repayment policies, there is a large group that may not realise that they too have a significant stake in the decisions that have to be made.”
Astro Awani reported that PTPTN will run a public consultation process, called “Kertas Konsultasi Rakyat”. It aims to get feedback on ideas regarding a new affordable loan repayment scheme and future structure to better improve PTPTN’s loan sustainability.
Sheikh Shahruddin hoped that all parties, including parents, students, employers, NGOs, financial institutions and members of parliament, would come together and make suggestions.
The 10 big ideas of new affordable repayment scheme are:
1) Deferment Of Repayment For Those Earning Below RM2,000 Monthly
2) Deferment Of Repayment For Those Earning Below RM4,000 Monthly
3) Change The Repayment System For New Borrowers To One That Is Based On Income Level – Income Based Repayment (IBR)
4) Mandatory Salary Deduction
5) Exercise Full Enforcement
6) Stricter Enforcement Measures Targeted At Hardcore Defaulters: Never Paid, And Long Overdue
7) Implement A Guarantor System
8) Removal of First-Class Graduates Loan Waiver, Or Replace With Partial Waivers
9) Reduce Loans And With Sufficient Notice, Discontinue Loans To Low-Rated And Non-Rated Private Institutions And Courses
10) Increase The Current 1% Ujrah For Student Loans Of New Borrowers
You may read the details breakdown of each idea on the next page.