As borrowers default on PTPTN, thousands to lose out in varsity loan scheme

(Malay Mail Online) – Short of money, the National Higher Education Fund Corporation (PTPTN) may be forced to cut the disbursement of loans to over 50,000 new students at local universities next year.

The federal university loan scheme has lost RM1.3 billion after 183,000 borrowers defaulted on their loans, Malay daily Berita Harian (BH) reported today.

“These payment failures are serious as they make up 19 per cent of the total PTPTN borrowers, so the fund is losing RM1.3 billion for future loans,” a PTPTN source told BH.

The source said the Education Ministry has allocated RM4 billion for the fund, but the amount can only cover approximately three-quarters of the new and existing borrowers.

“PTPTN may tighten the requirements for new borrowers to make sure more people can get the loans,” said the source.

In a separate report, BH also reported deputy education minister Datuk Dr Puad Zarkashi (picture) suggesting the names of PTPTN defaulters be published in newspapers.

“PTPTN must take a earlier proactive action, including working together with the Internal Revenue Board and Immigration Department,” he said.

Education Minister II Datuk Seri Idris Jusoh suggested last year for defaulters to be blacklisted under Bank Negara Malaysia’s bad credit list.

However, Putrajaya shelved it in August 2013 bowing to widespread criticisms that the move would only add further strain on the livelihoods of Malaysia’s young graduates.

In November last year, Education Minister Tan Sri Muhyiddin Yassin said a total of 412,245 borrowers did not service their PTPTN loans.

The deputy prime minister said, of the total, Malays formed the largest number of defaulters at 328,550, followed by the Chinese (55,445) and Indians (28,250).

There are currently 1.24 million PTPTN borrowers according to the latest figures.