DECEMBER 11 — We should just rename the Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) fund. Quit calling it a loan. Seriously.
PTPTN or Malaysia's National Higher Education Fund Corporation provides education loans to Malaysian students but loan repayments have been notoriously non-existent.
Recently, I read about Prime Minister Anwar Ibrahim’s decision to scrap the PTPTN loan waiver for exemplary students.
Like most folks, I felt a little bad for those burning the midnight oil for top-notch grades. It’s even worse if these students come from struggling families who (financially) planned for the loan exemption due to, say, the student getting a 1st Class Honours.
However, two things sprang to mind which affected my sense of empathy.
One, the brute fiasco of PTPTN debt as a whole. And, two, the fact that these top students can simply, uh, choose not to repay anyway (?).
Because the way the PTPTN fiasco has played itself out, practically the only way to "save" the fund is to recategorise and rename it.
At present, PTPTN’s total loans stand at approximately RM40 billion. That’s about 1.3 million borrowers — yet less than half of them ever pay back.
As of 2025, roughly 430,000 borrowers (33 per cent of active cases) have made zero repayments, totalling RM6 billion in arrears.
Add this amount to the other category of total arrears (i.e. overdue payment) as of today and we get approximately RM11 billion which is unlikely to be recovered in part, let alone in full.
Now for the bad news.
To calculate the arrears for the future, if we follow historical trends for PTPTN non- or partial-repayment (which is slightly more than half of borrowers), we’d expect a further RM11-15 billion potentially in the wind.
Long and short, PTPTN is facing approximately RM22-26 billion in bad or doubtful debt (see Note 1).
In contrast, the 1MDB scandal involved “only” about RM18 billion. Let that sink in.
So we got more than RM20 billion in loans which, for all intents and purposes, are never going to be repaid anytime soon.
This de facto makes a mockery of the concept of any “incentive to pay back”, doesn’t it? It’s like talking about an “incentive” to win the Wimbledon when every tennis player automatically wins the trophy without even trying.
I mean, if many thousands of students can default on the loan with minimal or zero penalties, why not everyone?
It’s perhaps revealing that the PTPTN amount is considered an item under Expenditures in the federal Budget; almost as if the government doesn’t expect to get it back.
So here’s my “radical” proposal : PTPTN should stop giving out "loans" and call the fund it really is: Aid, grants, allowances, stipends, even “scholarships” (which would sound weird if annually more than 160,000 students are “awarded”).
Imagine the paperwork and anxiety saved.
Note 1: Here’s another presentation of the breakdown: Present Zero Payment (RM6 billion) + Present Outstanding Amount from Partial Payment (RM5 billion) + Future Zero Payment and Outstanding Amount (RM11-15 billion) = RM22-26 billion.
References are aplenty but you could do worse than check out Jan, W. S. W. (2020). Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb (No. 5). ISEAS-Yusof Ishak Institute and Ong, K. M., & Tan, Y. S. (2016). The Sustainability of the PTPTN Loan Scheme. Penang Institute.
* This is the personal opinion of the columnist.
