PETALING JAYA: The National Higher Education Fund Corporation (PTPTN) today revealed two popular misconceptions about the government’s promises regarding the fund, namely that it had pledged to write off the debts of borrowers and to abolish the fund altogether.
Sheikh Shahruddin Sheikh Salim, chairman of PTPTN’s public consultation independent advisory panel, said this was observed following a series of town hall sessions in five states which collected feedback from close to 19,000 people.
“The most common misinformation that we had to correct at these sessions is that the government supposedly promised borrowers that they would not have to make repayments, and that the call for PTPTN to be abolished was part of Pakatan Harapan’s (PH) manifesto in the run-up to GE14,” he said in a statement.
He said the coalition had made two promises regarding PTPTN, that is to lift the travel ban against defaulters and to defer repayment until a borrower’s salary reaches RM4,000.
He said the travel ban was lifted soon after PH won the general election.
“Meanwhile, the Cabinet will deliberate on the extent to which it can achieve the second promise when we submit our final proposal with feedback from the people,” he said.
Among the factors for consideration included in the public consultation paper regarding deferment of payment is the possibility of PTPTN only recouping RM950 million a year, as 68% of borrowers are believed to earn below RM4,000.
The paper also projects that a fresh graduate with a starting salary of RM2,000 and an annual increment of 5% will take 15 years to earn RM4,000.
“The question is, pay now or pay later in your late 30s, but never about not paying, which is a rampant assumption,” Sheikh Shahruddin added.
He said the public is free to propose that PTPTN be abolished but added that the people should be aware of the potential consequences and have ideas about how to deal with them.
He warned that discontinuing the fund would mean the private sector stepping in to provide higher education loans.
According to the consultation paper, PTPTN charges 1% Ujrah compared to commercial loans which have much higher interest rates. Some also have more stringent requirements that could sideline those from the lower income group.
It said writing off the RM40 billion debt would only add to the government’s financial strain as Putrajaya would have to reimburse those who have made full repayment or have been consistently servicing their loans.