Private colleges may cut fees to attract students

TVET centres remain shuttered since pandemic started with total revenue loss of more than RM160m and 16 centres closed down


PHEIs under growing pressure to cut fees by as much as 20% to attract students as enrolment dwindles due to the fallout of the pandemic on the economy.

The National Association of Private Educational Institutions president Assoc Prof Elajsolan VM Mohan said private colleges have been cutting costs to survive by downsizing staff, especially part-time academics and reduction in salaries.

He said Technical and Vocational Education and Training (TVET) institutions have suffered a lower student intake as they are not allowed to hold in-person classes when 80% of their programmes are laboratory/workshop based requiring face-to-face teaching.

“TVET centres have remained closed since the start of the pandemic. The total loss of revenue for this sector is more than RM160 million and 16 centres have since closed down.

“Of about 600 vocational training centres, 200 of them are not able to enrol students. If the current situation continues, more than half of these training institutions will close down,” he told The Malaysian Reserve (TMR).

Elajsolan said all ongoing skills programmes have been suspended, not only affecting more than 10,000 students but trainers as well would lose their jobs. This would have a greater effect on the economy of the country as skilled workers are the backbone of the industry.

“When the economy recovers, the industry would suffer due to shortage of skilled workers and again we would have to depend on foreign labour.”

Even before the pandemic, about one-fifth of the total number of private colleges had enrolments of less than 100 students, mostly those that are outside the Klang Valley and major cities and towns, according to Elajsolan.

He said colleges may continue to see a decrease in enrolment because since pandemic started, there have been a shift in the demographic where some people in the middle 40% (M40) income group have dropped to the lower tier of M40 or even bottom 40%.

“Though we have a PTPTN (National Higher Education Fund) loan, the loan is limited and will not sufficiently cover the entire tuition fees and living expenses. Thus, with current conditions, the industry may experience a lower enrolment.

“A new enrolment of SPM this year will not make up for the ‘loss’ of enrolment from previous years. Overall, we are experiencing a 20% to 30% drop. For the PHEI (private higher education institution) industry, this will affect us financially for at least the next four years,” he said.

The enrolment of foreign students will continue to decline due to uncertainty caused by the pandemic.

He said students from India, Bangladesh, Pakistan, Sri Lanka and Nepal are still not allowed into Malaysia, and predominantly, Malaysia attracts international students from these countries.

“However, the government now allows international students who have gotten their vaccinations to come in and quarantine in the campus, hence they don’t have to pay huge sums for quarantine in hotels.

“So, I hope this will encourage them to come in. Hopefully the current situation here doesn’t deter them from coming to Malaysia.”

He also said the PHEIs are generally unaided with no specific stimulus package to assist the industry even under the People’s Protection and Economic Recovery Package or Pemulih.

If at all, the aid could come from the wage subsidy programme which is applicable to all industries. However, it depends on the eligibility of the company.

“PHEI industry contributes annually about RM40 billion towards the national GDP and more than 50% of post-secondary education is supported by the PHEIs, thus saving the government billions of ringgit.

“Being one of the biggest sectors contributing towards the national economy, the government should provide stimulus packages, as a recovery initiative, so that we can survive and continue in complementing and supplementing the government’s role in providing tertiary education access to school leavers who are not able to gain entry into public universities,” he urged.

Malaysia University of Science and Technology professor Dr Geoffrey Williams said none of the stimulus packages had anything specific for PHEI although most can use the general help for businesses, wage subsidies and some of the grants.

Williams, who is also the director of Williams Business Consultancy Sdn Bhd, said some of the students may have some small handouts and graduates who could use the PTPTN waiver, but otherwise very few have benefitted just like everyone else.

“The PTPTN waiver, higher unemployment especially among graduates and lower salaries for graduates and youth will all have a structural effect on the stability of PTPTN, so this is ripe for reform.

“The government should establish a new task-force to look at structural changes, closure of failed institutions, mergers and acquisition by public and private colleges to consolidate efforts, transfer credits to stable universities, economise on costs and improve quality,” he told TMR.

He believes PTPTN can play an important role in this, but it must be reformed and above all a new independent regulatory framework to look after students and faculty must be established.

“Both students and staff have suffered terribly while owners and senior managers have been hardly affected as normal.

“It’s time to be positive and look to rebuild the PHEIs in a world-class way rather than to try to prop-up old, stale business models run by old, stale management that have reached the end of the road,” he reckoned.