PKR communications director Fahmi Fadzil said a good number of students could have benefited from 1MDB’s RM42 billion had its fund not been allegedly misappropriated.
He said this amid the move by National Higher Education Loan Fund (PTPTN) to no longer offer 100 percent loans due to dwindling funds.
“In just five years of operations, 1MDB’s debt stood at more than RM42 billion without profit.
“How many education aid the people could have received from 1MDB if money was not wasted on gambling and alcohol parties?” he said in a statement today.
The US Department of Justice (DOJ) claimed that US$3.5 billion was misappropriated from 1MDB and had moved to confiscate US$1 billion in assets allegedly acquired using the money.
The money was reportedly used, among others, to pay gambling debts and fund parties with Hollywood celebrities.
While billions of 1MDB’s money were allegedly misappropriated, PTPTN is finding its funds shrinking.
Fahmi said PTPTN’s updated policy of only providing partial loan will reduce the opportunities for students to further their studies and their parents may find it harder to support their children’s education amid tough economic times.
“The government should review the RM2.4 billion slash to the education budget and inject more funds to PTPTN to ensure that full loans can be provided,” he said.
Beginning the end of 2014, PTPTN only provided loans of up to 85 percent for private university students while public university students are offered up to 95 percent.
PTPTN chairperson Shamsul Anuar Nasarah said the fund had until December last year disbursed RM56 billion in loans but had only recouped RM8 billion as many had not paid back.
However, Fahmi said this may not necessarily be the case as some cannot afford to pay back.
He pointed out that some graduates are struggling to get a job and also have to deal with the high cost of living.
“Therefore, the government is urged to resolve the root of the problem which is a faltering economy that is plagued by corruption and leakages.
“If this continues, it is not only education loans that will be affected as many other incentives for the people will also be impacted,” he said.