DESPITE the attractive discounts offered in Budget 2023 to settle their loans in full, National Higher Education Fund (PTPTN) borrowers said they are not able to take up the incentives.

They told The Malaysian Insight they would rather stick to monthly payments, owing to the financial position they are in, coupled with the fear of an economic downturn “just around the corner”.

They said even though they might make extra money, they would rather use it to top up their daily expenses to try and deal with the high costs of living and uncertain economic situation.

Private sector worker Aishah Ghani said the incentive was very attractive and she was keen, but lamented that her savings were insufficient.

“It’s so unfortunate. I just don’t have enough money saved on my current salary.

“I can’t afford to save as much as I want because of the rising cost of living and other mandatory financial commitments.

“My salary barely covers my monthly expenses,” the 27-year-old said.

The 20% discount for full settlement is effective from November 1 and ends on April 30 next year.

On top of that, the government also offered a 15% discount for settling 50% of the balance and 15% for payments made through salary deductions.

Another borrower, Jamilah Hariz, 36, said she too could not take up the full settlement offer and would keep to her monthly commitments.

Jamilah said she would not use her savings if she were to take up the incentive because she needed the savings for other financial matters.

“No. I wouldn’t use my savings to settle my PTPTN loan because there are other more important commitments to meet, since the forecast is that there would be an economic downturn next year.

 “I don’t have much money saved up and whatever I’ve saved would be for emergency,” Jamilah said.

She added that the government should have given more deductions because people are still burdened with debts and the cost of living as a result of the devastating Covid-19 pandemic.

Businessman Adi Amri Ruzman, 32, also believes not many borrowers could accept the offer of settling their loans with the incentive.

“There would be no problem paying off in full if the the outstanding balance is pretty small. For me, my balance is RM50,000.

“How am I to make such a payment in full? I would if I get a financial windfall,” the engineering graduate from a public university said.

Borrowers with high outstanding amounts expressed similar sentiments, saying they would rather use whatever money they have to meet their daily needs.

Property agent Fikri Zaini said he chose to save whatever extra money he has, rather than settle his PTPTN loan in one go because the interest rate on monthly repayment is still low.

“I’d rather save my money to meet the possible economic downturn that’s forecast for next year,” the 30-year-old said.

Customer service employee, Philip Gerard Panirchelvam, holds the same view as Fikri.

The 20% discount offer was simply unattractive as his outstanding debt is still high.

“With the high cost of living, I still can’t afford or have much money to settle the loan,” the 25-year-old said.

However, video editor Muhammad Hambali Mohd Idrus, 26, welcomed the incentive, saying it was a way to encourage repayments.

“I have been repaying faithfully monthly for a long time, irrespective what happens.

“So I am happy there is this kind of incentive.

“Personally, I believe the government should take steps to to raise higher awareness to the public to repay their debts,” he said.

But the incentive could not be enjoyed by borrowers who are already struggling to make regular payments.

Online entrepreneur, Zulaiha Szah, 27, said she found it difficult to make her repayments due to economic pressures.

“It’s difficult for me because of the cost of living now. Even repaying my PTPTN monthly is so difficult,” she said.

Writer Azreena Md Zin, 27, is happy that she will be able to enjoy a 15% discount if she continues to service her loans on a monthly basis.

That way, she could use the money she saved for investments, she said.

“I would rather keep to my monthly repayments and whatever balance I have to be kept as savings or use it for investments – as long as we consistently service our loans, and it doesn’t affect or jeopardise our ability to buy a house,” she added. – October 9, 2022.