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Sustainable solutions for PTPTN

  • The government must be firm and not to reverse the policy just to please a particular segment of the society. Photo courtesy: Bernama

Sin Chew Daily

PTPTN will convene a roundtable meeting to draw up ten major proposals meant to boost the loan repayment rate. Public consultation will subsequently be held to gauge the effectiveness of these proposals.

Looking from the positive perspectives, PTPTN's public consultation initiative will allow it to collect more pertinent views and opinions from the public in its quest for workable solutions to address the tacky issue of usually low debt repayment rate.

Of course, in the end the proposals have to be submitted to relevant departments such as the education and finance ministries for further deliberation.

The proposals will come from local scholars, professionals, parents and students, and PTPTN will host talks and roundtable meetings to discuss these proposals.

From the democratic consultation point of view, inviting interested parties to take part in the discussions is consistent with the public's will.

According to PTPTN chairman Wan Saiful Wan Jan, some 51% of the two million borrowers have not started servicing their loans or have paid inconsistently.

To achieve the repayment target, PTPTN is hoping to collect RM2 billion this year.

In the 2019 Budget tabled by the new Pakatan Harapan government last year, borrowers earning more than RM1,000 per month would have between 2% and 15% of their salaries deducted for loan repayment.

Unfortunately due to powerful backlash from the society, this measure was subsequently withdrawn in December, and PTPTN has remained inconsistent in its decision-making over this issue since then.

Among the proposals open for public consultation include deferred loan payment for borrowers earning less than RM2,000 a month. This will benefit about 26% of borrowers but will not completely solve the problem of loan arrears. Without further measures, it will be impossible to address the problem of loan defaulters who have crossed this income threshold.

As for the proposal to defer the repayment of borrowers earning less than RM4,000 a month, based on the country's current salary structure and standard, majority of borrowers will have to take between six and 15 years to reach this income level, meaning PTPTN will have to bear up to RM100 billion in unsettled loans by 2040.

Among the other proposals, restrictions will be imposed on loan defaulters, including jail sentence, confiscation of property and non-renewal of passports. Some of the restrictions even go beyond the borrowers to their parents, relatives and even their universities.

It is easy to see that these proposals have been made with the sole objective of increasing the loan repayment rate. Generally speaking, such proposals will not completely resolve the current problems.

PTPTN borrowers have an irrefutable obligation to service their debts, and must never put PTPTN last on their priority list while they have the financial ability to service their loans.

While the government can provide some incentives to help them pay, the borrowers must not take things for granted, as such facility should be extended to people who need it more.

Moreover, this also involves the moral principles of the borrowers themselves. Do bear in mind that there are plenty more people who need this facility.

As for the government, it must be firm in its decision-making and not to reverse the policy just to please a particular segment of the society.

The government must draw up a set of sustainable and comprehensive solutions after public consultation is held, to ensure that PTPTN loans will not evolve into a massive financial burden for the government, allowing more needy students to enjoy the facility to complete their studies.

 

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