PETALING JAYA: Student activists have panned Putrajaya’s increase of the repayment threshold for National Higher Education Fund Corporation (PTPTN) loans from RM1,000 to RM2,000, saying it is not good enough.
The Universiti Malaya Association of New Youth (Umany) asked deputy education minister Teo Nie Ching, who announced the increase yesterday in Parliament, to clarify how the proposed 2% wage cut would increase to 15%.
“I am reminding the government to announce more details of the arrangement, its terms and conditions, how they drew out the ratio from 2% to 15% to pay off the debts based on one’s salary, what is the period given to pay off all the debts and the calculation method used in this system.
“To convince people, you must have data and research papers to back your plan,” Umany president Wong Yan Ke told FMT.
In the 2019 Budget tabled earlier this month, the government announced a scheduled repayment scheme of between 2% and 15% of the borrower’s monthly income, applicable to those earning more than RM1,000 each month.
According to Teo, a 2% wage cut, or RM40, will be made as soon as the borrower’s salary reaches RM2,000. This would increase progressively to 15% according to the borrower’s monthly wages, she told the Dewan Rakyat.
This, however, only applies to the middle 40 (M40) and bottom (40) income groups, while those in the top 20 (T20) will continue to service their loans “since they come from affluent families”.
Wong said any debt payment system should not be based solely on a PTPTN loan taker’s salary but the financial standing of his or her family as well. Some, he said, were still poor and were the sole breadwinner of the family.
On Teo’s suggestion that first-class honours students in the T20 group pay back their loans and not be exempted unlike the B40 and M40 groups, Wong said he welcomed the decision. This was what activists were fighting for, he said.
“Some of them might have low salaries but come from rich or T20 families. If that is the case, they should not be giving any excuse to pay the debts based on their salary,” Wong said.
The change in policy comes on the back of a protest by students from various local universities who marched from Universiti Malaya to the Parliament building to protest against the loan repayment schedule announced by the government in the budget.
This is because it contravenes what Pakatan Harapan (PH) had promised in its manifesto: that PTPTN loan takers will only need to service their loans after their salary hits RM4,000 a month.
The Gabungan Pembebasan Akademik (GPA) told FMT while the decision to increase the threshold was laudable, it was still not good enough as it “does not solve any of the fundamental problems in the scheme”.
GPA secretary-general Siti Nurizzah Tazali cited a Bank Negara estimate which puts a person as requiring RM2,700 a month to live comfortably in Kuala Lumpur. They also need to deal with home and car loans as soon as they start working.
“We need to begin establishing savings to stabilise our financial situation. This is why we felt the original cutoff of RM4,000 was a reasonable target,” she said, adding that the new threshold would only benefit some PTPTN graduates.
Siti added that the government had long been “disingenuously suggesting” that PTPTN defaulters were hurting the national budget, which she said was not true. PTPTN takes its money from private lenders and depends entirely on repayments.
“Even if we somehow manage to force everyone to repay on time, all we are doing is feeding guaranteed profits to these private lenders and to the private universities and colleges. PTPTN was set up to fail.
“In our view, students will continue to be the punching bag in this debate over where exactly to set the PTPTN income threshold. PTPTN must be nationalised and ultimately replaced with free education funded by taxation on the wealthy,” she said.
Student activist Syazwani Mahmud said the “slow edging” towards the originally promised threshold of RM4,000 was proof that the government and the education ministry “don’t really care for students”.
“Stop giving the excuse that the government has no money and the economy is struggling. These issues could have been resolved by the government too.
“(Finance Minister) Lim Guan Eng previously said there would be no tax on the wealthy to prevent shock to the financial system. Yet, they decide to make students repay PTPTN starting at RM2,000.
“Is this fair to students even when some of us have to support our families, or come from low-income backgrounds?” she said, adding that it should not be a burden on students because Putrajaya was “unable to solve PTPTN’s structural problems”.
She said she would personally keep pushing for the government to keep to its original promise.
Parti Sosialis Malaysia Youth deputy chief Sharan Raj said it was ironic how Malaysian students spent money to return home and vote for PH on May 9, but were now being “squeezed out of their already meagre salaries”.
Sharan asked why the government was not looking at ways to cut down costs in PTPTN, questioning why it was not placed in a government building in Putrajaya and whether the remuneration of its directors and executives had been looked at.
“This means PTPTN, for a statutory body, pays a huge sum in rent. All these savings could have been passed to increase the repayment threshold,” Sharan said.
“The inability of the government to hold on to its promise was because the PTPTN model was never sustainable in the first place.
“Malaysia must consider imposing a Capital Gains Tax (shares, bond, large deposits, sales of lands) on the top 1% to increase government revenue to fund education. They are the biggest beneficiaries from an educated and skilled workforce,” he said.