THE National Higher Education Fund Corporation (PTPTN) was put under the spotlight recently when its chairman Datuk Ismail Mohamed Said proposed that the board stop giving loans for expenses to students by 2013.
Stating that the corporation could no longer cope with the financial burden brought on by borrowers who did not repay their loans, Ismail said the corporation was thinking of giving out loans based on the rate of the school fees of students.
PTPTN was established in 1997 to provide low-interest study loans to students studying in tertiary institutions. It has since disbursed RM41.6bil to 1.87 million students as of Sept 30 this year.
A total of 104,083 students had defaulted on their loan payments from 2007 to Sept 30 this year, while 69,573 court summonses have been issued to stubborn loan defaulters.
A series of measures have been taken to haul the defaulters into repaying their loans, including publishing the names of the defaulters in newspapers and barring them from leaving the country.
Compulsory salary deductions for the repayment of the PTPTN loans will begin in 2013 to help borrowers repay a reasonable amount of the loan over a length of time.
Nevertheless, the proposal put forth by the corporation to stop loans for living expenses remains a suggestion that has yet to be finalised.
Student groups have voiced their concern that those from the lower income families would suffer if the PTPTN loan does not cover their living expenses.
Higher Education Minister Datuk Seri Mohamed Khaled Nordin said the ministry is still waiting for a full report from the corporation regarding the proposal before making final decision on the matter.
He was reported to have urged PTPTN to continue giving loans for expenses and that the corporation should look for other sources to support its existing funding.
He added that PTPTN's plan to stop giving loans for expenses in 2013 would be brought to the ministry for discussion.
"At the same time, the ministry hopes that PTPTN will find additional funds to support existing financing in the form of endowment, wakaf or contributions.
"PTPTN needs to explore this aspect because if the corporation decides to stop giving out loans for expenses, students from the lower income groups may be badly affected," said Mohamed Khaled.
Meanwhile, Universiti Malaya student representative council president Mohd Syahid Mohd Zaini said students would be impacted badly if PTPTN decides to do away with loans for expenses.
"The living expenses in the major campuses are very high — students will struggle to survive if they are not given loans for expenses.
"The majority of the university students are not from rich families. I'm afraid that students will give up studying if they do not have financial support," said Mohd Syahid.
He added that should PTPTN reduce the loan for living expenses, colleges and universities would have to lower the course fees - The Star