PTPTN problems and some solutions
Hafidz Baharom, Sun Daily
BY NOW, many students and parties have voiced their disillusionment over the broken promise announced by National Higher Education Fund (PTPTN) chairman Wan Saiful Wan Jan, which was part of the Budget Speech on Nov 2.
The Pakatan Harapan manifesto had promised that PTPTN repayments would be deferred until individual salaries hit RM4,000.
The recent announcement that repayments would instead be triggered by an income of more than RM1,000 was definitely disheartening.
Honestly, if Wan Saiful is reading this – just tie repayments to those earning above minimum wage.
It is a lot simpler in the long run and would actually move either up or down depending on the government’s already set definition of a living salary.
Coupled with news that there will be no more discounts and even no more switching it into scholarships for both middle and high-income groups regardless of merit, it just shows that the fund is in more trouble than initially thought.
The PTPTN is a rolling fund. If nobody pays back, then there will not be any cash to pass on to the next batch of students wanting to study in tertiary institutions, which they themselves, and their parents, can’t afford.
Thus, by not paying back PTPTN loans, we continually shrink the supplementing of money students use mostly to deal with their tuition costs and cost of living while studying.
Couple that with the fact that we have more students studying compared with the year before and we have a problem with a shrinking amount of money for a growing number of freshmen.
I can assure you that unless the government wants to suddenly write off the RM50 billion debt by the fund and start from scratch, nobody is going to get a free education.
That being said, let us split this problem up into chunks that need to be solved individually.
The first problem would be to ensure PTPTN has enough money for the next batch of students.
The second problem is to set a threshold comfortable enough for people to make repayments without affecting their pockets too much.
The third problem is to take punitive measures against those who do not pay off their debts, even when they can afford it.
The fourth problem, outside of PTPTN’s jurisdiction, is to raise salaries enough so that people can actually afford to pay their loans.
Of course, PTPTN can no longer depend purely on repayments alone to fund future students. This is why they have set up funds to allow people to save money for their kids’ tuition, known as the SSPN-i programme.
PTPTN needs to move away from being solely dependent on government funding.
Thus, owning assets such as land and even dormitories, which they can rent out to students and leverage for loans, would solve two problems – students will rent rooms from PTPTN rather than rent-seeking property owners looking to make a quick buck, and PTPTN recycles their money immediately while also making income by leasing out land or ready shop lots to cater to their student renters.
Have these dormitories serviced by buses and trains, have a student card programme to lower these costs and, of course, disallow car parking at the dormitories, which would allow those parking lots to be rented out for additional income to PTPTN.
Seriously, students should do away with the obsession of owning a car or a bike when they’re living on PTPTN.
For the third problem, I still advocate blacklisting each and every person who does not pay their PTPTN loans at all, but this would be a regression. Tough love is necessary in this case, especially for those who have not paid a single sen for more than three years.
As such, perhaps it is time to declare these people bankrupt by law. Another such action would be to freeze any contributions to their Employees Provident Fund (EPF) accounts until they pay the amount due for all those years of non-payment.
As for the second and fourth problems – there is no easy solution because it will trigger a vicious cycle.
To solve these, we need higher salaries doled out to people, which will require higher productivity. To achieve this would mean hiring fewer people in the workforce, pushing automation, thus increasing unemployment.
And with an increase in unemployment, it would mean the need for the Employment Insurance Scheme (EIS) to dole out cash for upskilling. If people still cannot afford to do so, they should be able to apply for a PTPTN loan. Thus, the cycle continues.
Honestly, if the end goal to all this is giving out free education, we need enough tax revenue collected to do so.
And since less than 10% of the Malaysian workforce are earning enough to pay income taxes, perhaps it is time to reconsider the timeline for such a utopian ideal.
So, unless you want to adopt the Scandinavian model of taxation where their value-added tax (our former GST) collects at least 7% of their GDP, with income taxes roping in 20% of their GDP, let’s stop talking about it.
