Nine out of 10 students are working during their free time and more than half are working to earn extra money
By SHAHEERA AZNAM SHAH / Pic By HUSSEIN SHAHARUDDIN
OVER the years, Malaysian graduates have been struggling to pay their student loans, while taking up low-paying jobs to keep up with the high cost of living.
Defaulters who are ill-equipped to progressively settle their education debt also claimed that they were not well-informed of any easy payment arrangements that they could opt for.
In August, Prime Minister Tun Dr Mahathir Mohamad said the outstanding student loans owed to the National Higher Education Fund (PTPTN) amounted to RM39 billion.
The situation has also led to an imbalance in the education fund for quite some time, which could also jeopardise the additional support system in the country’s education sector.
In 2016, the government announced that 97% of the 728,935 PTPTN recipients who graduated from 2014 failed to repay their PTPTN loans.
There have been many initiatives to encourage loan repayments and to ease the burden of borrowers such as offering discounts for a full settlement.
Pakatan Harapan’s manifesto prior to winning the general election on May 9 includes the postponement of PTPTN repayments by graduates whose salaries are below RM4,000 a month, while abolishing the blacklisting policy.
As an immediate result, more than 429,945 PTPTN loan defaulters were removed from the Immigration Department’s travel blacklist.
Nevertheless, according to HSBC Holdings plc’s report titled “The Value of Education — The Price of Success”, Malaysian university students have to resort to working part time to bridge a significant amount of gap amounted to RM43,500 in their education funding.
The report stated that parents are contributing roughly around RM24,100 to their children’s university education, which is insufficient to cover the current total cost of education.
“In Malaysia, parents say they contribute on average RM24,100 towards their children’s university education.
“However, the students estimate that they spend RM67,600 over the course of their degree on tuition fees, accommodation, bills and lifestyle costs, leaving a significant gap of RM43,500 to fill from other sources,” the report read.
According to the study that included 500 parents and 100 Malaysian students, 7% of the parents revealed that they have had received help from “the grandparents” to plug some of the funding gaps.
“Parents are taking on extra work, sacrificing holidays and turning to borrowings to help pay for the full cost of their children’s university education.
“Meanwhile, students are spending several hours a day in paid employment to help keep up with the costs and improve their job prospects,” the report stated.
HSBC Bank Malaysia Bhd Malaysia head of retail banking and wealth management Tara Latini said the cost of getting an education in Malaysia is much higher than anticipated by parents.
“It is clear that many parents are committed to funding their child’s university education, but in reality, the costs are often much higher than they are prepared for.
“With student finance presenting an increasingly complicated picture, many students are finding alternative sources to keep up with the costs, including paid employment and borrowings from friends, family or personal loans,” she said.
She said being ready with the financial preparation from earlier on can help alleviate financial pressures for both students and parents.
“Over half of Malaysian parents with a child at university worry that they do not have the financial resources to support them, and over two-thirds said they wish they had calculated a budget for their child’s university education in advance,” she said.
The report stated that nine out of 10 Malaysian students are working during their free time and more than half are working to earn extra money.
“The additional money may be used for fees or cost of living, but also for splashing out, as on average a Malaysian student over the course of her studies spends RM5,728 on foods, RM2,872 on clothes and accessories, and RM2,600 on entertainment,” it said.
In addition, the report revealed that university students also allocate a large portion of their time after class in paid employment, exceeding the amount of time they spend on education.
“Malaysian students spend an average of 3.4 hours a day working, more than they spend in the library, which is 2.1 hours or studying at home, which is 2.3 hours,” it said.
Regionally, Malaysia is ranked second behind China, which recorded a funding gap of US$12,698 (RM54,590), and is among countries with the largest funding disparities, while the US remains at the top of the global list.
“Most parents would prefer their child to not have to work part-time while studying at university, with 79% saying they intend to pay for their basic living costs, so they can concentrate on their studies,” it said.