Subscribe to our Telegram channel for the latest updates on news you need to know.
KUALA LUMPUR, April 7 — Those with scholarships from the National Higher Education Fund Corporation (PTPTN) will now only be required to start repayments once their salaries hit a certain threshold, the Education Ministry announced today.
Minister Tan Sri Muhyiddin Yassin, when launching the Malaysian Higher Education Blueprint 2015-2025 today, explained that the existing PTPTN repayment formula will be changed into an “income contingent loan”, which allows loan holders to delay payments until they reach a certain income level.
Currently, PTPTN holders are required to start repayments six months after they complete their studies.
“For student funding, sustainability will be enhanced through improvements to the PTPTN repayment formula, which will change to the ‘income contingent loan’.
“This means, graduates only have to pay back loans when they start earning at a certain level,” Muhyiddin said.
He did not specify, however, the income threshold outlined under the ministry’s newly introduced PTPTN repayment scheme.
Last November, PTPTN loans were cut by 5 per cent for public universities and 15 per cent for private universities.
At the time, PTPTN revealed that up to RM1.2 billion in defaulted loans had piled up, pushing the government to resort to barring debtors from travelling abroad and listing the 558,475 errant borrowers on the Central Credit Reference Information System (CCRIS), which could affect approval for loan applications, credit cards and hire purchase.
Think tank Penang Institute said yesterday, however, that these changes could result in an estimated 69.2 per cent of local private universities being on the brink of financial ruin in the coming year.
The think tank’s general manager Ong Kian Ming also complained that the private tertiary education sector was largely ignored in the National Higher Education Sector Blueprint 2015-2025 despite private university enrolment totalling to almost “half of the total enrolment.”
The National Higher Education Blueprint launched today saw a 10-step approach to transforming the higher education system, which includes improving the quality of vocational education, providing more monetary support to students and universities, encouraging research and publication, increasing collaboration with Asean tertiary institutions and increasing the usage of online learning.