NATIONAL Higher Education Fund Corp (PTPTN) borrowers said they will have a better chance of settling their loans and better financial plan now that the government has offered discounts.

They told The Malaysian Insight that the initiative under Budget 2022 is timely and will come in handy.

Azhani Fisal, 24, said the discounts will help her plan her cash flow and savings.

“Introducing this initiative offers borrowers a chance to settle their loans rather than prolonging them, which, in my opinion, will not benefit the government,” said undergraduate and early childhood teacher.

Azhani, who earns a minimum wage income, has an RM20,000 loan to settle with PTPTN.

Finance Minister Tengku Zafrul Tengku Abdul Aziz had announced three forms of discounts to encourage and facilitate PTPTN loan repayments during the tabling of Budget 2022 in October.

Borrowers who settle their outstanding balance in full will get a 15% discount, while those who settle at least half of their outstanding balance in one payment will get a 12% discount.

Borrowers who opt to repay their loans via direct debit or salary deduction on a predetermined schedule will get a 10% discount.

Adam Muqreez Shah, 20, said the initiative will lessen the burden of individuals who have had their salaries slashed, but still need to repay their loans.

“I support this initiative 100% because the pandemic has added a lot of burden on many people. This initiative can help them be more determined to work hard and pay off their debt at a discounted rate.”

He said he is motivated to work and fully pay his RM7000 loan with PTPTN.

The PTPTN discount initiative was first introduced by former prime minister Najib Razak in Budget 2017. It was abolished when Pakatan Harapan came to power, but has now been reintroduced under the current administration.

A banker, who wanted to be known only as Tisham, said it is good that the government is reviving the initiative, adding that he had benefitted from the first round under Najib.

“At the time, it was not long after I started my career, so I took advantage of the discounts and direct debit deductions and refinanced my outstanding loan.

“A 10% discount on monthly repayments (offered then) was a big deal for me as my monthly repayment was almost RM300.”

Tisham, 29, said the discounts encouraged him to continue paying off his student loan.

“Having direct debit or auto deductions is a great idea. It helped me to better manage my finances and stay committed.

“Coming from a person who just started his career back then, building a great credit score is essential. As the PTPTN repayment is reflected on your CTOS score, it helped me maintain a good track record over the years.

“I do not think I will be where I am now (in terms of credit score) without the discounts, which helped me stay committed.”

In November, the government announced that 539,284 PTPTN borrowers have not repaid their loans as at September 30.

The Higher Education Ministry in a reply posted on the Parliament website said the total is among 2.42 million borrowers who have completed their studies and were supposed to settle their loans, which amounted to almost RM24.6 billion.

“As many as 427,861 borrowers have been consistently paying off their loans, while 705,648 have been making inconsistent payments.”

The ministry said PTPTN has approved loans to more than 3.5 million borrowers, with a total disbursement of more than RM64.8 billion, as at September 30. – December 20, 2021.