June 11, 2019
A commentary by Zaidi Azmi
FOR a money-lending outfit whose finances have seen better days – no thanks to the antics of its defaulters – the National Higher Education Fund has been rather soft in managing its ever-ballooning debt.
The harshest the fund, widely known by its Malay acronym, PTPTN, did was barring defaulters from travelling overseas and this was something that every other bank in the country does.
Mind you that prior to last year’s national poll, the travel ban via listing defaulters on CCRIS was the only notable punitive measure that the student loan provider had dished out in order to incentivise defaulters into paying their dues.
But despite the ban, more than half of PTPTN’s 1.9 million borrowers still defaulted. According to last year’s statistics, the number of defaulters stood at 972,000 and that 356,000 of them were hardcore defaulters who have yet to pay a single cent.
And now that the ban has been lifted, courtesy of some of our politicians, PTPTN had, since May 9 last year, presented the public with a number of new solutions that were ill-received as it was not the promised compromise that was dangled at election rallies.
Some backgrounders are necessary here. Apart from lifting the travel ban, Pakatan Harapan had also pledged to defer repayment for borrowers earning below RM4,000 a month but decided to backtrack because it was unfeasible to do so.
Unfeasible in the sense, even with an optimistic five per cent annual salary increment, it would take most graduates six to 15 years the reach the said salary range which will increase PTPTN’s debt to rise over RM100 billion in mere 20 years.
Following the public outcry, PTPTN opted an approach that no money-lending institution would do, which was to essentially ask the public, including its borrowers, the most acceptable way to get back the money it loaned.
I know, weird right?
In actuality, the ongoing public consultation is basically unnecessary as PTPTN is legally empowered to do what banks can do to defaulters, including declaring bankruptcy, seizure and sale of assets and direct salary garnishment.
But since its inception 21 years ago, PTPTN, which has currently amassed a total debt of RM40 billion, has only bankrupted one person.
Will PTPTN be in a much better situation if it was a tad rigid in bending over backwards to accommodate its defaulters? Who knows? The only certainty however, is that at some point it needs to drop this nice guy act.
Even more so when it was recently revealed that the three-week-long online public survey had so far garnered 20,000 participants which was – assuming if all of the respondents were PTPTN’s debtors – a mere 1.04 per cent of its total borrowers.
And against such a backdrop, perhaps the cracking of PTPTN’s proverbial whip would be an apt just dessert for nonchalant defaulters. Especially so since their lackadaisical attitude will affect the educational fate of the country’s future generations.
It is however, anybody’s guess if PTPTN has the will to do so.
Time is of the essence here. The survey that PTPTN is conducting that will end this Thursday could be the last chance for the public to have their voices heard.
Anymore bending and its back will likely snap.