Why PTPTN cannot be abolished

(The Star) – The Government cannot afford to abolish the National Higher Education Corporation Fund (PTPTN) as doing so now will result in RM43bil uncollected loans.

This money, said Prime Minister Datuk Seri Najib Tun Razak, 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.

“Also 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,” he said in his latest posting on PTPTN in his 1malaysia.com.my website.

Najib admitted that PTPTN, which was first introduced 15 years ago, had not been without criticism.

“There have been calls to replace the system with free tertiary education for all as a measure of lessening the repayment burden on students.

“We have weighed the pros and cons of this. While abolishment does offer an instant respite to students still repaying their loans under PTPTN, there are other factors to consider,” he added.

As of now, he said, between 85% and 95% of tuition costs were already being subsidised by the Government, and student living expenses were factored into the PTPTN loans.

Furthermore, he said, the very principle of 100% subsidy of college and university fees was one that few countries had followed.

However, he said, the Government recognised that debt was an issue of concern to Malaysians, especially fresh graduates and that was why they were only required to start paying their loans after they found full employment.