Last week, the National Fund for Higher Education (PTPTN) announced it would not meet its collection target of RM26 billion for this year. Instead, it may only manage to collect roughly one third — a measly RM8 billion — for 2016.
Reacting to this, PTPTN has said it will not be able to give full loans to those furthering their studies next year, limiting their loans to 95 per cent for public universities and 85 per cent for those going to private institutes in 2017.
The government has issued an ultimatum to civil servants to service their PTPTN debts on pain of being terminated from work. Subsequently, lawmaker Nurul Izzah Anwar issued a statement that this was unfair, even going so far as to link it to the debts of 1Malaysia Development Bhd (1MDB).
On the Umno side, a junior youth member says that the PTPTN was driving our youths to bankruptcy — yet another far-fetched accusation.
As much as I am into reducing household debts, I am not in the business of teaching Malaysian citizens to be totally irresponsible to the point of not being held accountable of their debts. What kind of message are our politicians sending to Malaysians?
That it is okay for Malaysians to be habitually spendthrift and not service debt, because Malaysian companies do it too?
Even if you cannot service the full amount owed to PTPTN, you can go to its centres and apply for a temporary waiver or renegotiate the payments. Its office in KL Sentral is even open on weekends, it has an office in most of the Urban Transformation Centres (UTC) and can even be approached via a hotline or email.
And is Izzah saying that it is okay for the civil service to be irresponsible in handling their personal finances while still holding a job in the civil service, opening them up to corrupt offers to settle their debts?
Similarly, not servicing your PTPTN will not put you in the bankruptcy black list as alleged by the Umno Youth leader. So what else do these youths take loans for?
Cars? A credit card? Perhaps even personal loans to go and get married?
Malaysia has a harsh ecosystem when it comes to finances and the youth need to deal with these realities. You will not graduate with a degree and immediately get a job which allows you to get a car, rent a room, afford a credit card and even go about like you’re the king of the world.
At the same time, loans will have to be serviced once you take them, unless in the case of the PTPTN, you score a first class degree which will convert it into a scholarship. Either that, or work hard enough to settle the debt by withdrawing from your Employee Provident Fund (EPF) Account 2.
Any politician telling you otherwise, giving you hope of a total amnesty of debt, is promising you something that is financially irresponsible. On a national scale, it is no different than the crony companies getting a bailout.
You might believe that this is “good for the rakyat”, but bailing out crony companies was good for the rakyat too because it kept people employed, earning salaries, producing goods and services which contributed to productivity and gross domestic production (GDP) statistics, and even made sure some money went to the EPF and Social Security (Socso).
Paying off your entire PTPTN loan does nothing of the sort. All it does is make sure you can fly out of the country for a holiday and spend money overseas, or afford more loans and debt which you shouldn’t be and can’t afford having.
And any politician who believes that debt should be forgiven on a whimsy should never, ever run a government.