PTPTN defaulters to be declared bankrupt then banned from leaving Malaysia

(MMO) – In future, the government will first declare Malaysians who default on their loans from the National Higher Education Fund (PTPTN) as bankrupts before they are blacklisted from leaving the country.

Deputy Education Minister Teo Nie Ching said the ruling Pakatan Harapan (PH) coalition’s promise to lift the current travel ban on PTPTN defaulters was premised on its belief that every citizen has a right to freedom of movement.

She added that declaration move is necessary for the government to be consistent in its policies.

“Just because we are the government, we cannot act as per our whims. So if we need to bankrupt a borrower to include them in the blacklist, we will do it in future. We will take necessary actions,” she said during Question Time in the Dewan Rakyat today.

She noted that the previous administration had been inconsistent in implementing policies with regards to borrowers who defaulted on their loan repayment in the past.

She said those who took education loans from banks were only blacklisted from travel abroad after they were declared bankrupt, but not PTPTN borrowers who defaulted on their loans but had yet to be declared bankrupt; their names would immediately be placed on the Immigration Department’s no-fly list.

“So I feel that is a little unfair for borrowers who need the money to finish their studies,” she said.

Teo was replying Kuala Kedah MP Azman Ismail who asked why PH listed the travel ban for PTPTN loan defaulters and if there was any effective way to compel them to repay their study loans.

Last month, PTPTN chairman Wan Saiful Wan Jan, said that 429,945 loan defaulters have been taken off the Immigration Department’s travel blacklist.

But he added that the defaulters who failed to repay their loans for tertiary education would remain listed under Bank Negara’s CCRIS system that collects credit information on borrowers.