Have we progressed if we are still a nation of debtors?
Our public policies are such that we are enslaving the majority to enrich the minority.
By TK Chua
If you read the news daily, you will soon realise that the most common issues making the headlines are the people’s high household debt, their problems in servicing existing loans and their difficulties in securing new loans.
We now have university graduates who are unable or unwilling to pay off the PTPTN loans they took. We also have people working full time but are unable to either secure or pay off their car and housing loans. We hear that PTPTN is now resorting to more stringent measures such as blacklisting and even restricting debtors from leaving the country. We hear that car sales are down and housing uptake is slow simply because many people are up to their necks in debt. We hear that repayment periods for car and housing loans will be extended further to make more people “eligible” for loans.
Why are we in such a conundrum where the more the country has progressed the worse the economic woes of the people have become?
I am being neither nostalgic nor unreasonable. We used to take three to four years to pay off our car loans, now eight to ten years is common. Housing loan repayments used to take about 15 to 20 years but 30 to 35 years is more the norm today. University education used to be almost free (tuition fees in the mid 1970s were less than RM200 per term), but now we are told tuition fees must be based on “market price.”
If economic development is good for the country, where did all the fruits of our labour go? If everything is relative, wages should be able to keep pace with prices to maintain the parity. But is this the case?
Today public universities charge tuition fees at market rates. But did the government reduce the allocations to universities given that students are now paying full fees? Almost every student is now on study loans, but has the government’s financials improved? The last time I checked, the hole was still as big as ever even with the GST being imposed.
In the 1970s, obtaining a university education was affordable because tuition fees were almost non-existent. Poor students got scholarships and bursaries to supplement their food and lodging expenses. The degrees they earned almost instantly provided them with social and income mobility.
Now universities are sprouting up like mushrooms. It is almost as if we create universities for prestige and to provide jobs for lecturers and professors rather than to meet the younger generation’s educational needs.
Many may think that PTPTN loans to students are a great favour the country has showered upon them. I suggest we think again; PTPTN loans is in fact money used to support the many hapless universities churning out degrees, the quality of which is suspect. We enslave students with debt and upon graduation, make them join the unemployment queue or accept jobs with meagre incomes.
We produce graduates but have no jobs to give them that are commensurate with their qualifications. How then can we expect them to pay off their PTPTN loans in time? It is a myth that the country needs more graduates when the structure of the economy has not progressed all that much.
Even if graduates are able to obtain graduate jobs that earn them graduate salaries, why must they take such long periods to pay off their car and housing loans? It is simple – prices have decoupled completely from salaries and wages. The longer the repayment period, the more interest the people pay and the less disposable income they have. Hence the vicious cycle continues.
Have we not realised that our public policies are creating a nation of debtors? We are in fact asking those who can least afford it to take more loans so that they can spend more to support those who want to sell them more overpriced university educations, homes and cars. We enslave the majority to enrich the minority.
I see this as a worldwide phenomenon.
TK Chua is an FMT reader.
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