More interest-free study loans proposed to prevent graduates from being burdened by debts
KUCHING: There should be more scholarships and interestfree study loans provided by the government to help young Malaysians pursue higher education without having to worry about incurring debts later on.
In making this call, PKR Women national vice-president Voon Shiak Ni said considering that education is a necessary investment for the younger generation of any nation, any aid or assistance provided by the government should not become a burden to those pursuing tertiary education.
“We need to be reminded that the young can easily choose not to further their studies and be ambitious – they might choose to idle their time away and be sucked into the ‘loitering culture’, which is a growing social problem.
“In this regard, we urge the government to give these young people the support and necessary aid towards facilitating and encouraging them to manifest their potential and be ambitious,” she said in a press statement yesterday.
Voon was commenting on a news report, which stated the call by many Malaysian students for the National Higher Education Fund Corporation (PTPTN) to abolish its high administrative charges which they said ‘felt more like usury’.
These students are those blacklisted by PTPTN for defaulting on their loan repayments.
“The student loan by PTPTN, which is supposed to be a financial aid to help our young people pursue further studies, is now viewed as another version of the loans obtained from ‘loan sharks’.
“This facility made them (students) debtors – they are burdened with loan tenures of 20 to 25 years even before they start working.”
According to Voon, these administrative charges – said to be used to offset operational costs as well as part of the charges imposed by financial institutions on funds borrowed by PTPTN itself – are calculated, on a monthly basis, beginning six months after the borrower has graduated.
“One of the most common reasons given for the defaulting of (PTPTN) loans is the administrative charges, which are equal to the interests being charged on any unpaid loan amount.”
She also understood the frustration felt by the young people upon seeing their names on the travel ban list due to the defaulting of the PTPTN loan repayment.
Citing an example, Voon said a 31-year- old graphic designer who was listed under the travel ban, was quoted on social media as saying that he never missed paying RM350 to PTPTN every month after he graduated with diploma in 2011 up to when he was retrenched in 2014.
“He stopped paying after the retrenchment and due to the administrative charges, the amount that he owed (to PTPTN) went back to the original ( loan amount of) RM15,000. He was very discouraged by this because it appeared that he had been paying for nothing.”
Voon believed that it is no help at all for PTPTN to keep up the administrative charges on the loan, in that they are burdening the young adults especially those who have yet to find employment after their graduation, those who have lost their jobs or those furthering their studies.
“There are those who disclose that they need to do two jobs to sustain their living expenses and pay their PTPTN loan.”
Voon said a government that puts the welfare of the young people as its priority, would not need to be reminded that it needs to correct the system in the repayment of the study loans.
“The fact is that the average monthly salary for fresh graduates is around RM2,500, and more than 80 per cent of PTPTN loan borrowers are earning less than RM3,000 per month.
“Considering that the cost of living has doubled – and even tripled – over the past few years due to price hikes and the shrinking of our currency, the government should at least waive the interests charged on the unpaid loan amount, if they could not abolish the repayment of PTPTN loans,” she said.