7 June, 2012

PTPTN Loans For Education – University and College To Continue Being Made Affordable


I have always believed in the importance of a good education. Not only is it right that people be given the opportunity to expand their knowledge, but there is a growing need for skilled talents in our expanding, information-led economy. There is a clear Government role in helping students obtain a tertiary education. That’s why JPA scholarships are offered routinely to deserving students to help them achieve their dreams of going to a top university or college, and why for students unable to qualify the Government also offers PTPTN as an alternative.

The PTPTN was established in 1997 as a means for students requiring financial assistance to further their studies. The fund consists of contributions, deposits and payments made to the organisation alongside investments to grow the reserve. The loan is repaid within six months of the student completing his or her studies, including an administration fee totalling 3% of the original loan. This can be further minimised by converting to the Ujrah scheme, which reduces the administration fee to just 1%.

Having been run for more than a decade and a half, PTPTN has not been without criticism. There have been calls to replace the system with free tertiary education for all as a measure of lessening the burden of repayment on students. We have weighed the pros and cons on this – while abolishment does offer an instant respite to students still repaying their loans under PTPTN, there are other factors to consider.

First, abolishment would cost the government RM43 billion in uncollected loans. This money could be used for many important causes to help the rakyat.  Within education itself, the setting up of technical universities offering free education requires significant resources. Second, the very principle of 100% subsidy of college and university fees is one that few countries have followed. Bear in mind that a good degree is a stepping stone to higher earnings, and that the taxes of some of the lower income households in our society contribute to that stepping stone

The Government does of course recognise that debt is an issue of concern to Malaysians, especially fresh graduates. Already, 85-95% of tuition costs are being subsidised by the government, and student living expenses are factored into the PTPTN loans. And while we are committed to helping students to land jobs upon graduation, those who have not yet found one will not be forced to repay their loans. We encourage instead that such students continue putting effort into their studies, and we will provide assistance if they wish to study abroad as an alternative.

I am a firm believer in providing education that is both affordable and of high quality to students. We will continue delivering this, balancing the needs of the rakyat with the nurturing of future talent.

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