FROM veterinarians to graphic designers, an increasing number of Malaysian graduates who have been blacklisted by the National Higher Education Fund (PTPTN) for defaulting on their loan repayments are urging the agency to stop the high administrative charges, which they say feels more like usury.

Dr A. Naomi, 40, has been paying RM350 a month to PTPTN for more than 10 years since she graduated but has yet to clear her debt of RM34,000.

“I can’t afford to pay my PTPTN loan because I have high commitments to worry about, such as my house loan, car loan, income tax and cost of living.

“Also, the high administrative charges are killing,” she told The Malaysian Insight.

PTPTN loan holders sign an agreement to pay administrative charges of 1% to 3%, depending on the level of tertiary education and other considerations, on their loans after a grace period of six months following their graduation.

Dr Naomi was paying 3% administrative charges on her loan, a rate she said was a huge financial burden for a fresh graduate starting a family. In 2008, the veterinary doctor applied to convert her loan type and she now pays 1% instead.

Still, she said the government agency should not be charging administrative charges at all, and that it should take into consideration the high cost of living and low wages that many students face upon graduation.

Travel blacklist

According to the latest statistics from the Department of Immigration, more than 50% of the 622,768 Malaysians barred from travelling abroad since 2010 are PTPTN loan defaulters.

For 28-year-old Arjunaidi Wan, being barred from overseas travel is a punishment he has no choice but to face as he claimed his monthly salary is simply not enough for him and his family to live on.

He said the administrative charges alone amounted to RM4,000, on top of the  principal RM20,000 owed to PTPTN.

“Remove the administrative charges so that borrowers just have to repay the amount of the loan. The administrative charges are causing the final sum owed to keep increasing,” he told The Malaysian Insight.

He said with stagnant wages that are barely enough to cover his family’s basic needs, it is almost impossible for him to repay his debt to PTPTN.

“The house, the children’s needs and the car are already costing me RM2000,” said Arjunaidi.

“I don’t agree to the administrative charges because the borrower is already burdened by other monthly payments. On top of that, there is no rise in salary, so how are we going to pay?”

When Nabil Saleh graduated, he aimed to clear his PTPTN debt in the shortest time possible, but financial troubles forced him to default on his repayments for a four year period.

The 31-year-old graphic designer, who has also been blacklisted by PTPTN, said he paid RM350 diligently every month after he graduated from his diploma course and started work in 2011.

He managed to pay back a total of RM4,000 before he was retrenched in 2014, and was unable to make the monthly repayments.

“I haven’t paid since 2014, and now, my owed amount has gone back to the original RM15,000. So what I had paid amounted to nothing, because the administrative charges increase every year.

“How can this be? PTPTN is an education fund, so it shouldn’t charge interest.

“I’ve just started working again for a few months, and my job is still not stable,” said the father of two in Kuala Selangor.

Two jobs 

For some, paying their PTPTN loans on time means taking on extra work or another job.

Dalilah Ramli, 27, said she wants to clear her debt as soon as possible so as not to incur extra administrative charges.

The marketing executive takes on extra work as a freelance copywriter so that she can pay more than the minimum RM350 a month to PTPTN.

“I pay RM500 a month, for a diploma loan of RM15,000. Thankfully, for my degree, I obtained a first class and so the loan was converted to a scholarship.”

She said it was unfair of PTPTN to charge such high administrative rates, especially to borrowers who were continuing their studies.

“Even if we pay consistently, the debt will take a long time to clear because PTPTN charges high administrative ates.

“And the administrative charges are kept up while we continue our studies from diploma to degree level.

“I’m lucky that I can pay more, because my commitments are not high and I’ve yet to start a family,” said Dalilah, who lives Shah Alam.

The Malaysian Insight has asked PTPTN for comment but has yet to receive a response. – August 6, 2017.