Caution over Pakatan pledge to allow deferment of PTPTN loan repayments


(TMI) – PAKATAN Harapan’s election pledge to let education loan borrowers defer repayments until they earn higher salaries is, on the one hand, welcomed, but there is concern about how the policy will affect future students.

Among its promises for its first 100 days in power, PH, in its 14th general election manifesto, said it will let National Higher Education Fund Corporation (PTPTN) loan borrowers defer repayments until they have earned RM4,000 a month.

Nordiana Nuzuin Akma Nordin, 29, said on the surface, she thinks the policy is fair, given the high cost of living and fresh graduates’ low wages.

In reality, it could take years before borrowers are able to pay off their loans, due to slow wage growth.

And even when they are able to do so, said Nordiana, they will likely have to juggle other financial commitments, like caring for dependents and family members.

“I think it’s fair (deferment of repayments), if borrowers understand that loans must eventually be repaid,” the graphic designer told The Malaysian Insight.

“Paying back the government ensures that future students will be able to apply for the loan, too. Future borrowers may be our own children.”

Unpaid loans as of March this year amounted to RM52.84 billion, said former PTPTN chairman Shamsul Anuar Nasarah before GE14. He resigned from the post last week.

PTPTN loan borrower Farhana Fuad, 28, agrees with Nordiana, saying the policy could make it difficult for future students to obtain loans.

She cited recent announcements by the PH government on Malaysia’s RM1 trillion debt, and wondered if deferments by PTPTN loan borrowers would contribute to the debt figure.

“While I support the deferment, it also takes years for some to earn RM4,000 a month. Some people work for years without making that much.

“So, they can’t pay off their loans and they keep accumulating interest. In the end, it causes more debt to the country.

“It impacts the future generation. We already have RM1 trillion in debt. How can the government support the education of future generations?”

While the policy appears rational, Universiti Kebangsaan Malaysia Professor Kartini Aboo Talib said Putrajaya must be careful with the potential repercussions.

“I think the deferment is rational, but it is also a rather populist approach to win over voters. We are now in the reality phase, where the government needs to evaluate the nation’s finances.

“It is about whether we have the capacity or ability to shoulder the debt. It is about what long-term plans we have to ensure that future generations have access to student loans to further their education.”

Kamalia Ramli, 31, a PTPTN loan borrower, said she feels that the policy is unfair to those who pay their loan instalments regardless of their earnings.

The freelancer said she does not have a fixed income, and yet, she does not neglect paying off her loan.

“I am a freelancer with no fixed income. Do I neglect repaying my student loan, and accumulate interest? The administrative charge is also increasing.

“I think borrowers should know how to set aside a certain amount of their income to repay their PTPTN loans, instead of spending the money on other things.”

 



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