Wanted: Feedback on debt collection
Public consultations will be conducted in the second half of the year.
THE National Higher Education Fund Corporation (PTPTN) wants to know the public’s opinion on the ways it can collect the RM20.7bil owed by its 1.9 million borrowers.
PTPTN chairman Wan Saiful Wan Jan says there will be a public consultation paper that focuses on loan repayment mechanisms. He adds that the document, which is a study containing the results and discussions with various stakeholders from December 2018 until March 2019, will be available online for public feedback. He says that among the stakeholders were bankers, economists, parents and student groups.
Wan Saiful says the engagement with the stakeholders was held following a lot of backlash from PTPTN’s proposal to carry out a salary deduction of 2% for those earning RM2,000 per month, with the scale going up to 15%.
There will also be townhall and roundtable sessions to discuss the ideas from the study, he adds. The document will also contain key facts regarding the various repayment mechanisms.
“The public consultation is a key step for us to develop the final, revised business plan for PTPTN,” he says at his office.
The ideas in the document are “quite diverse” with some easier to execute and more popular compared to others.
Wan Saiful reveals that among the ideas in that document is the loan repayment deferment for those earning less than RM4,000 a month and a scheduled repayment scheme of between 2% and 15% of the borrower’s monthly income.
“The possibilities are definitely there but I’m not going to disclose the content of that document yet,” he adds.
The public consultations will be conducted in the second half of 2019 for three to four weeks.
It will then be summarised and presented to the Education Ministry for further scrutiny, he explains.
“Then the minister (Dr Maszlee Malik) will need to take it to the Cabinet for the final decision,” says Wan Saiful.
He says the amount collected by PTPTN last year was RM3.35bil, a drop from the RM3.99bil collected in 2017.
Extending the grace period for repayment upon graduation from six months to 12 months in January 2018, was among the reasons for the drop.
“We hope to collect back at least RM2bil this year,” he adds.
“Repayment is really important for PTPTN as it is a revolving fund.”
He points out that if borrowers do not pay back their loans, there will be no funds available for future generations of students.
On another matter, Wan Saiful, who has taken on PTPTN since June, says he wants to change the public’s perception of the corporation.
“This whole repayment problem exists because we are so dependent on debt (to fund our studies),” he says, adding that he wants the public to think of PTPTN as a savings body and not just one that hands out loans.
“That will be a complete reversal of how people see PTPTN now. It will require a lot of effort but I think it can be done.”
He says that PTPTN’s savings and investment product, the SSPN account, has a lot of extra advantages including takaful coverage, tax exemption, and a high dividend.
“The incentives are there for you to save,” he adds.
Overall, 3.91 million SSPN accounts had been opened with a total deposit of RM4.5bil made as of Dec 31, 2018.
He says that this year, they have set their target at a total deposit of RM1bil in SSPN accounts.
Wan Saiful says that there are plans to provide a matching grant for those who save using the SSPN schemes. It could be capped at RM500, and targeted at the B40 and M40 groups. He says this is similar to what was given last year. The matching grant was part of Budget 2018, and was only applicable until the end of last year for the first 500,000 depositors for pupils aged between seven and 12.
The public consultation is a key step for us to develop the final, revised business plan for PTPTN.
Wan Saiful