Look into ways to ensure PTPTN coffers are replenished

MALAYSIANS cannot resist a discount. People are willing to queue up for hours when there is a sale in town, even for a small price reduction.

Thus, it does not come as a surprise that borrowers are responding to the discounts offered by the National Higher Education Fund Corporation (PTPTN) to settle their study loans.

Since the scheme kicked off on Oct 1, the repayment rate has shot up to 49.9% and PTPTN chairman Datuk Ismail Mohamad Said is confident the target of 70% is attainable.

Under the scheme, borrowers who fully settle their loans in a lump sum at any time between Oct 1 this year and Sept 30 next year will get a 20% discount.

Borrowers who consistently pay their loans according to the schedule for 12 months, effective from Oct 1, are entitled to a 10% discount.

This discount offer, announced on Budget Day, appears to be working and while detractors will criticise this as a case of rewarding irresponsible behaviour, we need to look at the bigger issue of how to keep this PTPTN loan scheme going.

The fact of the matter is that without PTPTN loans, many students will not be able to further their studies at tertiary institutions.

The issues of why there are so many defaulters is multi-faceted. Some are deliberate delinquents who obviously see the loans as a right.

Then there are those who truly struggle to pay up because their first job upon graduation does not give them enough to meet even their basic needs. Others blamed the PTPTN for being a bureaucratic mess which severely tests the patience of even those who are prepared to pay according to schedule.

One borrower told The Star she had been faithfully paying up her loan according to schedule since graduation, but years later, PTPTN sent her a letter threatening legal action for not paying at all.

It took almost a year to sort out the bureaucratic oversight.

So, these are the issues that need to be addressed so that the PTPTN scheme remains a beacon of hope to help our young citizens get a tertiary education.

Applicants must be properly screened so that the need-based approach is not abused.

And to ensure efficient payback, PTPTN must work out a system where the graduates, upon getting their first job, set the loan repayment as top priority.

Employers can be instructed to make deductions at source.

Financial institutions that give out car loans and even credit cards can include a checklist to ensure that anyone who still has a PTPTN loan must clear it first before other loans can be approved.

We certainly do not want those who can buy the latest smartphone claiming they cannot pay the monthly instalment for the PTPTN loans.

All these must be looked into so that even this discount scheme is seen as temporary to address a situation whereby the PTPTN coffers need to be replenished to help future borrowers.

Those who are delinquent must understand that the loan is a privilege and not a right. And they must think of those who will be deprived if they are not responsible in paying back what they owe.

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