THE National Higher Educa­tion Fund Corporation (PTPTN) should consider copying the Tabung Harapan method to resolve its RM40 billion debt, a public consultation session on the fund’s financial woes heard yesterday.

A PTPTN borrower, who only gave his name as Akmal, said the Tabung Harapan model could be used to ensure PTPTN has enough money to disburse loans.

“Some corporations may give donations to PTPTN to support its efforts to help students pursue their higher education.

“A scheme for corporations can be introduced. Some countries do this,” he told PTPTN’s public con­sultation independent advisory panel at its second session held at Penang’s Universiti Sains Malaysia yesterday.

Tabung Harapan Malaysia was a crowdsourcing fund set up by Pakatan Harapan on May 30 last year shortly after the coalition took over Putrajaya in the 14th general election.

The public and companies donated to the fund to help the government pay off a RM1 trillion national debt inherited from the previous administration. The fund closed on January 14 with more than RM202.7 million collected.

PTPTN is touring the country to collect feedback on 10 ideas proposed from the corporation’s roundtable engagements with various stakeholders on how to force borrowers to repay their loans.

It held its first public consultation session on proposed loan repayment policies at Universiti Malaya last week.

At the second session in Penang yesterday, the advisory panel’s chairman Sheikh Shah­ruddin Sheikh Salim said the idea of a “tabung” (fund) is good, as corporations may make donations as part of their corporate social responsibility (CSR) programmes.

“They can get tax exemptions. We will bring this up with PTPTN,” he said.

End exemptions

Akmal, who was among some 50 people at yesterday’s session, also supported the idea of scrapping the repayment exemption for first-class honours students.

One of the 10 ideas is to remove the loan waiver for first-class graduates or replace it with a partial waiver.

Currently, borrowers who obtain first-class honours can apply to convert their PTPTN loan to full scholarships.

Akmal’s suggestion was also supported by Calvin, a Universiti Teknologi Petronas student, who said it was unfair because some courses are more difficult than others for students to earn first-class honours.

“Even among engineering schools, some courses are harder than others. It may be easier for some to earn first-class honours because of that.

“It is really unfair. Scrapping the exemption is a good idea,” he said.

Sheikh Shah­ruddin said the exemption is an issue raised during PTPTN’s roundtable discussion with stakeholders.

The contention with the exemption includes the belief that it is easier to get first-class honours at lower standard institutions and that first-class graduates have better chances of securing jobs and higher pay, making them more able to repay their PTPTN loans.

PTPTN statistics also showed that the exemption did not benefit B40 borrowers much, as only 35% of those earning first-class came from the group.

More flexible options

Meanwhile, Shuhada Ismail, an assistant manager at KDU Penang University College, who deals with student loans, said the current 12-month grace period given to all borrowers before they are required to start loan repayments should not be offered across the board.

“It is now very lenient. After a year, everyone will tend to take it easy. The grace period should be made optional, not for everybody.”

Earlier, a USM student who gave her name as Tan, also proposed that the grace period be more flexible and given only “upon request”.

Some borrowers are able to make repayments sooner than others, she said.

“If everyone gets the grace period, everyone will relax and many won’t pay their loans back.”

Her friend Choong, also from USM, said the 1% ujrah (service charge) imposed by PTPTN is too low, suggesting a progressive rate system according to the number of years borrowers have worked.

“Those who have worked five to 10 years should be able to pay more,” he said, commenting on the idea to increase the 1% ujrah for new borrowers.

However, Akmal said the low rate should be maintained in the interest of B40 borrowers.

“I am a B40 borrower from an urban poor background. Even at 1%, it can be hard for poor families.

“It has taken me 11 years to pay back my PTPTN loan. I should be able to pay back fully next year. When I first started paying back, I had difficulties.

“If the ujrah is to be increased, it should be when the economy is better,” he said.

Some also urged the implementation of an income-based repayment (IBR) system, which will allow borrowers to pay what they can afford according to their salaries.

The public are being asked how much in percentage should a borrower’s salary be deducted if he or she earned between RM1,000 and more than RM8,000.

For those earning above RM8,000, PTPTN is asking whether the deduction should be between 8% and 13%.

UTP’s Calvin said the proposal is good but it should also take into account borrowers’ other financial commitments.

Stanley, who said he was not attached to any school, said the 8% to 13% deduction for those earning more than RM8,000 is a little steep.

“It takes very long for people to earn a RM8,000 salary. By that time, they will have families or even kids going to university themselves. 

“If they pay also a minimum 8% for PTPTN, it means they will be cutting some 12% of their take-home pay after their income tax and EPF deductions. 

“I think the deduction should be reduced to between 6% and 10%.”

Other ideas being studied by PTPTN are deferment of repayment for those earning below RM2,000, or for those earning less than RM4,000; exercising full enforcement by taking legal action; enforcing strict measures on hard-core defaulters; implementing a guarantor system; and reducing or discontinuing loans to low and non-rated private institutions and courses. – May 26, 2019.