Thursday, April 12, 2012

PTPTN - Student Loans Should Be Repaid Not Waived

Are we not talking about student loans that were given to students at institutions of higher learning who would now be diploma and degree holders, who certainly would also be earning reasonably good incomes, and as such I do not see why Malaysia (or the government) should excuse these persons from repayment of their student loans? The failure of the BN government was the neglect in pursuing those who defaulted in their loan payments - and this apparently has resulted in a sum of RM24.7 billion owed to the National High Education Fund (PTPTN) by these persons, who certainly will no longer still be non-income earning students.

Their failure in repaying their student loans, where I believe their repayment obligations were also made easier, i.e. by reasonable installment payments. PKR's proposal that this debt be 'written-off', and those that have paid up their loans be rebated is unacceptable. 

Remember, that in Malaysia, we have more than 30% of workers who earn below poverty line wages. The country also has a debt of about RM450 billion. And the Malaysian government, has been withdrawing subsidies even on necessary basic essentials which have cost an increase in the cost of living of the poor Malaysians and their families. Hence, that oil and gas revenue can and should be used for so many other things other than benefiting these persons who have abdicated on their obligations to repay their student loans.[ see Malaysia's Debt - RM450 billion, Singapore - Zero; Malaysia's Debt 54% of GCP, Indonesia only 24%, Singapore 0]

Wooing voters is one thing - but this certainly is not the way. I would be interested in also knowing how many of our MPs, ADUNs, Senators, Local Councilors, public servants, etc who have not settled their PTPTN Loans, and if they have not settled and have also failed in their obligations to make their regular installment payments, I would go as far as suggesting that they should even maybe be disqualified from running for public office. A failure to repay student loans, especially to the government and to student unions, is an act against the people of Malaysia, would you not say so...






PKR offers formula to settle PTPTN debt

The RM24.7 billion owed to the National High Education Fund (PTPTN) by students can be financed with just RM2 billion per annum from oil and gas revenues over 15 years, said PKR.

Its strategic director Rafizi Ramli said that RM2 billion was a mere fraction of the government’s oil and gas revenues, which he said stood at RM59.8 billion in 2010, including taxes on foreign oil companies.

Speaking a dialogue session with students in Shah Alam last night, Rafizi said in response to demands for a formula to PKR’s claims that it would write off PTPTN loans to defaulters.

“In other countries, oil and gas revenues would be placed in a separate fund solely meant for investing in the future, such as in research or education,” said the former Petronas senior manager.

He also said that the RM43 billion cost cited by Prime Minister Najib Abdul Razak on Saturday was misleading, because that is only the sum approved, but not the sum disbursed thus far.
Rafizi pointed out that official PTPTN documents showed that as of March 31, 2010 the fund had only disbursed RM24.9 billion.

“RM43 billion is a lie. The prime minister clearly lied when he said RM43 billion. Perhaps he was lied to, or his spin-doctor misinformed him.

“PTPTN’s information clearly shows that it is only half of that,” he said.
Rebates for those who paid

As a last resort, he said PTPTN loans could be refinanced by issuing bonds.

To be fair to borrowers who are repaying or have repaid their PTPTN loans, Rafizi suggested that a rebate should be offered for the RM2.8 billion collected up to 2011, whether in part or in full.

In order to fund future higher education, he said that the government should reverse the trend of encouraging higher education to be undertaken by the private sector, which he said started in 1996.

He said the government should build ten new public institutions of higher learning over the next ten years, with the goal of accommodating 100,000 students. The cost of tuition and accommodation are to be borne by the government.

“The abdication of the responsibility of the government in providing higher education to the society will have a severe financial, societal, and especially economic impact 20 to 30 years down the line,” he said.

In addition, he said more funds could be made available by cutting wasteful spending, especially in defence expenditure.
Sustainability

Rafizi suggested that there should be a new education fund for students who opt to study in private institutions.
However, he said, there would be few applicants for this fund if students can find vacancies in their courses of choice in public universities that are free and of high quality.

This in turn would force private institutions to consolidate and improve their competitiveness, which he argued would lower the cost of higher education even for those who opt to study there.

When asked by a member of the audience whether his model of funding higher education is sustainable once oil and gas resources have depleted, Rafizi conceded that it would not be possible.

He said the quality of local public institutions of higher learning would need to be improved to the point where it could attract grants and endowment funds, hence become self-sustaining and able to offer its own scholarships.

“Now that we still have about 20 years oil supply, we cannot delay a drastic reform to improve our education.” - Malaysiakini, 11/4/2012, PKR offers formula to settle PTPTN debt

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