Maszlee says the fund identifies a new repayment scheme following recommendations gathered from various parties
pic by BERNAMA
THE Cabinet will decide on a new repayment mechanism for the National Higher Education Fund Corp (PTPTN) before the year ends, said Education Minister Dr Maszlee Malik.
In a recent parliamentary written reply, Maszlee said the fund has identified a new repayment scheme following recommendations gathered from various roundtable discussions with various parties, including banking institutions, parents and students.
“This new mechanism will be tabled for Cabinet ministers’ approval in the fourth quarter of 2019,” he said in response to MP Datuk Seri Hishamuddin Hussein (Barisan Nasional [BN]-Sembrong). The Sembrong MP asked the minister to state the outcome from PTPTN’s public consultations which collected nearly 35,000 feedback.
In a separate reply, Maszlee said total PTPTN loan repayment between January and August this year stood at RM1.5 billion, half the amount collected for the same period in 2017 at RM3.03 billion.
He said this in response to a query by MP Datuk Seri Idris Jusoh (BN-Besut), who was a former higher education minister.
The Malaysian Reserve last year reported that PTPTN held some RM6.4 billion worth of non- performing loans in 2018, attributable to one million former tertiary students.
PTPTN chairman Wan Saiful Wan Jan said the amount was worrying as its total loan had reached RM40 billion — among the highest with a government guarantee after 1Malaysia Development Bhd.
It was revealed that some 616,000 borrowers had failed to repay loans in a consistent manner, leading to around RM3.6 billion of arrears as at 2018.
Over 50% or 356,000 borrowers have not paid a single sen to PTPTN with RM2.8 billion of arrears, while 26% or 499,000 students managed to settle RM5.9 billion worth of loans. The remaining 23% or 438,000 have been paying consistently to the fund.
At the time, Wan Saiful said it was crucial for the fund to find the right policy and mechanism to collect the outstanding money to ensure that PTPTN continues to provide loans to future applicants.
The Pakatan Harapan government had promised to defer payments of all graduates earning below the RM4,000-a-month thres-hold in the 14th General Election.
In December last year, the government announced the Income-Contingent Loan Repayment scheme, which was meant to come into force in January. The proposed mandatory salary deduction scheme was subsequently halted after it received brickbats.
Under the arrangement, borrowers will see their salaries being deducted every month to repay their student loans. The scheme would only apply to those earning above RM2,000, with a deduction between 2% and 15%, depending on the salary bracket.
PTPTN then held an internal review and roundtable sessions with stakeholders from December last year to March this year. Following the discussions, a proposal, called the public consultation paper, was drafted.