WHILE the spotlight has been on the National Higher Education Fund (PTPTN) and the Pakatan Harapan government for breaking its election promise on deferring loan repayments until borrowers earn higher salaries, some graduates are managing to pay their monthly instalments despite earning less than RM4,000.

For some, it means cutting back on things they enjoy. Others admitted they were enabled by their circumstances, such as living with their parents or having a helpful spouse.

They also used a variety of ways to handle the debt. Some used auto deductions from their salaries, others used savings from their Employees’ Provident Fund, while others took advantage of discounts whenever they were offered.

A graduate, who wanted to be known as Lily, said she started repaying her loan a year after graduating in 2008 despite earning less than RM4,000.

Earlier this year, she cleared her RM19,700 debt she took to study mass communications at Universiti Sains Malaysia.

“Every month, I put aside RM200 to pay back PTPTN. Half of the money came from my salary while the other half came from EPF.

“My salary was around RM3,900 when I was paying the loan,” the supervisor in her mid-30s told The Malaysian Insight.

It felt like a burden at first, but she eventually adjusted and did not feel the pinch any more.

It helped that she did not have major financial commitments other than a car loan and her husband paid most of the household bills.

“I could still save RM500 every month after budgeting RM1,500 for household expenses like food. I didn’t have to sacrifice much for my study loan. We could still go on holidays.”

Lily said she did not want to put off repaying the loan because she believed all debts must be paid.

“The money allowed me to get an education to find a good job. So, it was only right to pay the money back after I started working.

“If you have a debt, just pay it. So, when you are dead, God will not question you about it,” she said in jest.

Using discounts

Normizan Qistina Kamaruzzaman, 27, is also on track to settle her RM21,000 loan, which she took for her applied science (biodiversity conservation and management) degree at Universiti Malaysia Terengganu.

Working as an assistant retail supervisor with a monthly salary of about RM3,000, she started paying back the loan in 2014, the same year she graduated.

She looks out for different repayment options and discounts offered to borrowers who regularly service their debt.

In the first two years, she repaid her loan through the bank before switching to auto debit to enjoy discounts.

“I paid RM250 a month through auto deduction from my salary. Then I took out savings from my second EPF account to pay off half the amount that could get a 10% discount.

“I should finish repaying my PTPTN loan by next year. I am anxious to settle the loan… too bad the government is not giving any more discounts,” the Perak woman said.

Normizan said she did not feel burdened as she did not have many commitments and she lived within her means.

“After paying the loan, my rent, depositing into my ASB (the Amanah Saham Bumiputera unit trust fund) and spending on transport and other expenses, I can still save RM500 a month.

“I think you just need to get your life in order and focus,” she said when asked if repaying her PTPTN loan had made life difficult.

RM1,200 salary

It is a big challenge, however, for graduates earning less than Lily and Normiza, such as Mohammad Farawin Samsul Kamal, 24, who earns a meagre monthly pay of RM1,200 as a warehouse storekeeper.

In Budget 2019, the government proposed that PTPTN borrowers start servicing their loan at a minimum income of more than RM1,000 a month through scheduled deductions form their salary ranging from 2% to 15%, depending on their earning.

The suggestion had many borrowers up in arms as it meant repayments would begin at a lower salary than the RM4,000 PH promised during the elections.

But Farawin said he still managed to pay RM120 a month for the RM15,000 loan he took to study gaming technology at the Arau Polytechnic in Perlis.

He has been meeting his monthly instalments for three years now, starting immediately after he found a job.

“I must be responsible for the money I borrowed. It is difficult with my low pay, but what can I do? Debts are debts and they must be paid,” he told The Malaysian Insight.

Another Arau Polytechnic graduate Izmin Ibrahim, 30, has been paying back his RM14,000 PTPTN loan for four years. The civil servant makes annual RM3,000 payments using his EPF savings.

“It may be burdensome, but not paying back the money may bring other problems.

“Luckily, we can use money from our EPF savings. If we don’t have this option, it will be harder to pay back the loan,” said Izmin, who studied tourism.

Careful budgeting

Fresh graduate Lee Pak Sing finds servicing his loan difficult on his RM2,300 salary and can’t wait for a wage increment.

The 24-year-old had to move away from his hometown and rent accommodation in Kuala Lumpur in order to work, and this eats into his expenses.

Besides rent, he has to repay another loan for his motorbike and phone bills. After deductions for his EPF, he often finds little left to enjoy good meals and entertainment.

“In order to pay my student loans, I budget my meals at RM20 a day and I eat less than I used to. Sometimes due to unforeseen payments, my savings are cut.

“I cut down on entertainment. I cannot spend on other things, so I mostly stay at home,” said Lee, who works as a business development executive and pays RM250 a month to service a RM48,000 study loan.

“Whatever money is left is used on toiletries, groceries, food and petrol.”

Bank employee Tang Yong En acknowledges that she is lucky enough to have a well-paying job and to live with her family.

“I am lucky, as I do not have to pay for rent or car loans. This allows me to have a little bit more money for things like a gym membership,” said the 24-year-old.

She said she feels for loan borrowers who have to move to the city for work, as the cost of living is higher.

Tang repays her loan using auto debit so she “doesn’t really feel the pain of monthly payments”.

She said this method was good as borrowers could get a 10% rebate on their monthly payments.

PTPTN said in June it saw a drop in collections beginning in January. Monthly average loan collections used to be RM300 million but has not exceeded that since the start of the year. The total amount repaid to PTPTN was RM3.98 billion as of last year. – November 21, 2018.