The education loan scheme will be RM24 billion in debt by 2020, says PKR's strategic director.
Basing his calculation on the current 10% to 17% annual approval rate, he said the National Higher Education Fund Corporation (PTPTN) would be in debt to the tune of RM24 billion by 2020, with the bulk coming from financing private education loans.
This means the total amount of loans approved could be as high as RM177 billion.
The enormity of these figures, Rafizi said, gave a new dimension to the debate on the country’s education model and capacity of graduates to settle their student loans.
He noted that the collection rate since PTPTN’s inception in 1997 had been less than 10%, at least up until 2010.
“This pops up a big question as to whether or not the debt can be collected one day,” he said. “Who will bear the cost of PTPTN’s debt one day?”
Speaking at a press conference here, Rafizi said the projected figures were based only on the current approval rates but could actually be higher. He urged Higher Education Minister Khaled Noordin to disclose the government’s estimates.
PKR has claimed that its proposal to make higher education free with prioritisation for public universities would cost taxpayers less than the current PTPTN scheme.
Rafizi noted that the higher education ministry spends an estimated RM8 billion on public universities, making the total government outlay for tertiary education worth RM14 billion.
Based on an average cost of RM17,000 per head plus an additional RM5,000 for living allowances, it would cost just RM11 billion to give free education to an increased public university enrolment of 500,000 students from the current 465,000, he said.
“This would only represent an added RM3 billion over the annual government budget.”
The free education programme and abolishment of PTPTN are among the key issues PKR is using to attract support from young voters.
PKR and its Pakatan Rakyat partners apparently see the higher education loan debate as one of the major factors that could bolster their chances of victory in the coming election. They expect the anger among lowly employed youths saddled with PTPTN debts to translate into voting support.
But Barisan Nasional leaders claim that the federal opposition’s “populists” plans would bankrupt the country. Prime Minister Najib Tun Razak has even accused Pakatan of making promises it would not fulfil, describing the proposals as “impractical and far-fetched”.
PKR has said the cost of bearing the free education programme and abolishing PTPTN could easily be offset by plugging leakages and improving the management of the country’s resources.—Reuter
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