Government to stop PTPTN Student Loans by 2013?

No move yet to stop ‘loans for expenses’: Malaysia 
By Punitha Kumar and Roy See Wei Zhi, New Straits Times, Tuesday, Nov 08, 2011
KUALA LUMPUR – The government has the final say on whether the National Higher Education Fund Corporation (PTPTN) will stop giving out student expenses loans by 2013.

Corporation chairman Datuk Ismail Mohamed Said said yesterday it was only a proposal and had not been finalized.

Student Expenses loans are separate from study loans and are granted to help students cover daily costs such as food, accommodation, books and transport.

“The final decision will be made by the government but study loans will continue as usual.”

The corporation had cited an ever-increasing burden caused by loan defaulters as the reason for making the proposal.

Meanwhile, several quarters hit out at loan defaulters for forcing PTPTN to propose the move.

Malaysian Youth Council president Maliki Rapiee said loan defaulters should pay up
and not leave the next generation of students to suffer the consequences of their irresponsible actions.

“The blame cannot be placed entirely on PTPTN for its decision to stop issuing expenses loans. The funds for new students was probably disrupted and this had prompted the decision,” he added.

Maliki said the costs would be high for students from poor families and those in the low-income group to bear during the course of their studies.

“There are many hidden expenses for a student such as food, travelling cost and textbook purchases, which will prove to be a monetary hindrance without an expenses loan.”

World Youth Foundation chief operations officer Varsha Ajmera said it was the responsibility of those taking loans from PTPTN to pay back.

She said, however, PTPTN needed to review and adopt a better mechanism to allow students to pay back their loans.

Varsha added that PTPTN should provide loans based on merit and family income to ensure that the loans were given only to those who needed and deserved it.

Foundation chief executive officer Mustapha Othman said the move would badly affect students from low-income families.

“The government must investigate and stop loan defaulters from passing the burden to future students who will not have access to expenses loans,” he said.

He said the quality of the country’s human capital was at stake if students had to work to earn money for their daily expenses, which would take up time for studying.

Mustapha suggested employers prepare a loan servicing system.

“This system will automatically deduct the salaries of staff to service their loans without delays.”

He applauded the government’s move to “lock-down” PTPTN loan defaulter’s passports to ensure they serviced their loans.

Universiti Putra Malaysia student representative council assistant secretary Tan Bee Fen said expenses could reach more than RM300 a month for those living in rented apartments or hostels.

She said students should take the initiative to identify loan payment methods upon graduating.

“PTPTN’s decision would inevitably cause students to take part-time jobs and lessen participation in co-curricular activities.”

National MIC Youth Higher Education bureau chairman Mahaganapathy Dass said there were many loan defaulters because of the failure to update personal particulars.

“These students usually move out of their parents’ place upon completion of studies but do not notify PTPTN of their new address.”

He said PTPTN statements or legal notices were sent to old addresses and many students were unaware when their names were blacklisted.

It was reported earlier that PTPTN had received only RM3.74 billion up to September, when it should have collected RM6.2 billion.

As of Sept 30 this year, PTPTN had approved RM41.6 billion to 1.87 million students.