Recently news broke that about 30% of 1.2 million student loan defaulters were found to be able to afford holidays abroad.
These defaulters were discovered through data-matching checks with other agencies, according to National Higher Education Fund Corporation (PTPTN) chairperson Norliza Abdul Rahim.
“I believe firm action should be taken against this group, as they clearly have the means to repay their loans but have failed to take responsibility for doing so,” she said.
Arrears totalled RM11.2bn, which included RM5.2bn owed by 359,000 borrowers, some of them as old as 60, who have never made any repayments.
“Therefore, it is only appropriate that those known to have the financial means to repay their loans should be pursued for collection,” she said in a recent interview with Mingguan Malaysia.
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Norliza added that some PTPTN loan defaulters are earning good incomes while working abroad. Many Malaysians were employed in Singapore, where their income is three times higher (based on currency value), she pointed out. “It is unreasonable for those earning between RM6,000 and RM10,000 not to repay their loans.
As repayments could be as low as RM100 or RM200, she believed that travel restrictions should be imposed on such high-income defaulters, as there was no reason for them not to make repayments.
The amount of outstanding arrears would jeopardise the sustainability of PTPTN’s funds and its ability to continue providing loans to other students in
It is appalling that defaulters, especially those earning higher incomes, did not have the moral conscience and decency to consider that PTPTN is a revolving fund depending on repayments for its sustainability.
Potential steps PTPTN could take to recover loans from defaulters include:
- Blacklisting by CCRIS (Central Credit Reference Information System) -This affects the borrower’s credit score and makes it difficult to obtain housing, car or personal loans later
- Requesting the Immigration Department to bar defaulters from leaving the country
- Informing financial institution about defaulters so that they face challenges in opening new bank accounts, applying for credit cards or getting loans
- Advising employers to check credit standing of these applicants to determine their integrity
- Asking employers to ensure payment of loans through salary deduction systems – linking PTPTN repayments directly to monthly payroll deductions (auto-debit) – similar to contributions to the Employees Provident Fund (EPF) or the Social Security Organisation (Socsco). This reduces missed payments and makes repayment habitual
Public relations campaigns
Campaigns could remind graduates that repayment sustains the fund for future students.
Providing online tools for repayment calculation, payment reminders and easier online payment channels would help.
Employers can be encouraged to assist in PTPTN repayment deductions when hiring graduates.
Enforcement with empathy
The government has to balance implementation with consideration.
Strict enforcement can push defaulters into financial hardship. But leniency may reduce repayment motivation.
Hence, flexible but accountable systems (like income-based or salary-linked repayments) are often seen as the best compromise.
Loan defaulters – a worrying problem
The loan fund model relies on repayments to recycle funds and provide new loans to future students. Large defaults and arrears weaken that mechanism.
Borrowers who delay or stop repayments impose a cost on the system (administration, collection and enforcement) and potentially on taxpayers if shortfalls arise.
The large outstanding debt could limit PTPTN’s ability to extend new loans unless repayments improve and enforcement or incentives are effective.
Borrowers not repaying their loans when they can afford it speaks volumes about the lack of integrity of these people. It is a grave concern for the country.
AGENDA RAKYAT - Lima perkara utama
- Tegakkan maruah serta kualiti kehidupan rakyat
- Galakkan pembangunan saksama, lestari serta tangani krisis alam sekitar
- Raikan kerencaman dan keterangkuman
- Selamatkan demokrasi dan angkatkan keluhuran undang-undang
- Lawan rasuah dan kronisme
As usual, the existing government and all before them have not and will not do much to seriously collect these debts because there is no political will to do so! All they are willing to do is merely provide lip service! There are ways to collect these monies due, the issue is whether the Government is seriously willing to do the absolute necessity to collect!