MP Wants First-Class Graduates To Repay PTPTN Loans Because They Can Afford It
"There is an inherent unfairness in this system."
By Nandini Balakrishnan — 20 Dec 2016, 07:12 PM
Serdang MP Ong Kian Ming thinks that PTPTN loan borrowers who graduate with first-class honours should not be exempted from repaying their loans.
The DAP lawmaker thinks that students who graduate with the highest honours classification usually get high-paying jobs that would allow them to repay their loans.
Ong said that the National Higher Education Fund Corporation's (PTPTN) move to allow students who graduate with first-class honours to convert their loans into full scholarships is a non-progressive move, as reported by The Malay Mail Online yesterday, 19 December.
The exemption has caused the corporation problems and losses due to this he added.
"From a progressive point of view, this is a very bad policy," said Ong at a forum titled, 'Sustainability of the PTPTN Loan Scheme' organised by think tank, Penang Institute, as quoted by The Malay Mail Online.
He claimed that researches in developing countries show that students from above average income groups have a higher possibility of graduating with first-class honours
"Let’s say out of 10,000 students, a hundred of them graduate first class. Most of these 100 graduates are those from the above average income group," added Ong.
According to him, these students from middle to high income families are usually equipped with relevant resources like laptops and reading materials from a young age which allows them to better prepare before going into tertiary education.
Moreover, based on Ong's observations, first-class graduates usually earn higher starting salaries. This, he says, would not exactly help the ones that are not able to pay their loans back.
"There needs to be an awareness that the system rewards those with better off families and those who are better equipped to repay their loans," explained Ong.
In 2015 alone, PTPTN's loan exemptions amounted to RM841 million.
It was also reported that PTPTN had provided a total of RM59.67 billion worth of loans to 2.6 million students up to November 2016.
However, the corporation has only received RM10.07 billion from 1.2 million borrowers. 1,574,700 PTPTN borrowers had failed to repay their loans that total up to RM32.07 billion.
With all these in mind, Ong has asked the government to remove all discounts, exemptions given to students that either repay their loans early or graduate with first-class honours
In 2014, PTPTN announced that borrowers can get a 20% discount of their total payment if they repay their loans by 31 March 2015.