Outstanding Rm10 8 Bil Ptptn Debt A Bitter Pill To Swallow

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THE National Higher Education Fund Corporation (PTPTN) loan repayment is in a pathetic situation where the government is caught in a quagmire and dilemma whether to spit or swallow.
This is following Auditor-General Datuk Wan Suraya Wan Mohd Radhi’s latest report which found an outstanding loan totally RM10.853 bil owed by 1.2 million PTPTN borrowers in 2023.
There are several reasons why 1.2 million PTPTN borrowers have yet to settle their loans, leading to an outstanding debt.
Many borrowers struggle with low wages, unemployment, or high living costs are struggling with financial difficulties, making it difficult to allocate funds for repayment.
Fresh graduates are unemployed or often take time to secure stable jobs, delaying their ability to start repayments.
Generally, borrowers do not prioritise repayment due to a lack of financial discipline or a belief that the government may waive or restructure the loans.
In the school curriculum on financial literacy, they should be taught the importance paying loans taken for any purpose. This culture of not paying back loan is detrimental to the nation.
There is a rise in cost of living particularly in urban areas, forcing many graduates to prioritise necessities over loan repayments.
There is a perception of government forgiveness with the periodic discussions on loan discounts, deferments, or potential write-offs which may encourage some borrowers to delay payments, hoping for future government assistance.
There is lack or stringent enforcement despite PTPTN’s measures, such as salary deductions and travel restrictions, enforcement mechanisms have been inconsistent, allowing defaulters to avoid repayment.
There is also a lack among borrowers to fully understand repayment terms, interest rates, or available repayment options, leading to delays.
The Malaysian government and PTPTN have periodically introduced measures such as discounts for full settlements and salary deductions to improve repayment rates, but challenges remain.
Solutions to the issue
(Image: Malay Mail)As of Dec 31, 2024, PTPTN reported that over 2.4 million borrowers have commenced loan repayments, with more than 1 million having fully settled their loans.
However, challenges persist, as approximately 383,637 borrowers have yet to begin repayments, resulting in outstanding debts totalling RM5.25 bil.
In response to these challenges, PTPTN has implemented several policies and initiatives to facilitate and encourage loan repayment.
The flexible repayment options borrowers can choose from various repayment methods, including salary deductions, direct debit, online payments via the myPTPTN app, and even utilising Employees Provident Fund (EPF) savings.
Loan reduction and restructuring to accommodate borrowers facing financial difficulties, PTPTN offers loan restructuring options. Borrowers can negotiate to reduce their monthly payments, with minimum repayments starting as low as RM50.
The repayment deferral to unemployed borrowers or those experiencing financial hardship can apply for a deferment of repayments for up to 24 months, providing temporary relief during challenging times.
The #PTPTSediaBantu programme aims to enhance communication between PTPTN and borrowers, offering support through various channels such as Careliners, live chat agents, and the myPTPTN app, ensuring borrowers have access to assistance without visiting PTPTN offices physically.
Despite these measures, the Auditor-General has recommended a review of PTPTN’s loan repayment collection mechanisms to address the substantial outstanding debts effectively.
Additionally, some have proposed alternative solutions to improve repayment rates, such as withholding academic certificates until loans are settled or implementing automatic salary deductions similar to the Monthly Tax Deduction (PCB) model.
This begs the question: with all the so-called stringent measures taken, why is PTPTN still not successful in recovering the repayment owned?
 
K.Tamil Maran KT Maran)
Seremban, Negri Sembilan
The views expressed are solely of the author and do not necessarily reflect those of  MMKtT.
- Focus Malaysia.

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