The National Higher Education Fund (PTPTN) is in dire straits due to its inability to collect on payments from students who have received the loans either choosing not to pay it back, or not being able to afford paying the loan back.
In its efforts, the PTPTN has finally been granted the ability to affect credit scores of its debtors, thus affecting anyone who has chosen not to service the loan with an inability to get a car or housing loan.
This is admirable for the government to allow, yet it is a far cry from helping to reduce the fund which is now RM50 billion in debt with the government holding the bill. More needs to be done to ensure these loans are paid so that it can actually become a “rolling cash” programme.
What this means is that debtors pay their loans, and current students get funds to further their studies. However, there is now a disconnect.
With more students gaining entry into tertiary education, the demand for student loans from the PTPTN is increasing exponentially, without any sustainable income to cope. Thus, it has moved to austerity.
The fund has now announced reducing the amount of cash each student gets — some getting only half of their needs.
And while these students can now join the menial workforce to make ends meet, the higher cost of living led to the movement describing how students in our varsities were starving — known as the Mahasiswa Lapar case.
Do I agree with the PTPTN reviewing its decision to get first-class degree holders to pay their loans which were converted to scholarships?
Absolutely not. Those who have graduated with first class degree have established a merit deserving a reward. Thus, why penalise those who have accomplished a merit worthy of a reward?
It would be a betrayal of promising reward for achievements in academia.
But I will suggest this instead — the PTPTN should sue those who have yet to pay their dues by linking up with the Employee Providence Fund (EPF) to determine whether or not these debtors can afford to pay off their loans.
As of Dec 2014, there were 6.66 million contributors who were active. Are we sure that among these, there aren’t those who chose to not pay their PTPTN loans whilst still looking to retire comfortably with enough savings?
Those are exactly the people that the PTPTN should go after.
Instead of penalising first-class degree graduates who have been granted their education costs as a scholarship, the PTPTN should instead link arms with the EPF and take a look at who are those thinking of using their retirement fund for housing and furthering their studies, while conveniently forgetting that they owe money for the degree they used to earn a living?
What can I say… Malays forget easily, especially when it comes to debt and politics.
Frankly speaking, this is where the PTPTN has a huge weakness — communication. For instance, do PTPTN debtors know that they can renegotiate the service rate from three per cent to one per cent to allow less money spent on interest and more used to service the loans?
Similarly, do they know that if they have more than one loan from the fund, they need to go to a PTPTN office to negotiate that these be combined into one, to service both at the same time to avoid being blacklisted?
And if I may add one suggestion… hire a centralised call centre to handle your calls because the whole concept of having an office executive doing it in this day and age is inefficient.
There is still a need for the PTPTN unless we want education to instead be handled by the banks.
And I can guarantee you, they will charge a bomb in interest rates, especially when they would not be government backed, and definitely would not give a one per cent rate of interest.