Malaysia Scholarship 2008-2009

Money woes mount for PTPTN

The National Higher Education Fund Corporation (PTPTN) gets a raw deal in its financial dealings – it has to pay a higher interest on loans than it charges and repays loans in a shorter period than it can collect.

The AG found that PTPTN had to pay back its loan to the Employees Provident Fund and Pension Fund in a much shorter period than it could get repayments from fresh graduates.

PTPTN also had to pay a higher interest rate of between 3.6% and 5.3% compared to the 3% interest it collected from graduates, the report said.

It added that until December last year, PTPTN paid a total of RM560.15mil in interest to the two bodies – RM497.73mil to EPF and RM62.42mil to the Pension Fund. 

“PTPTN has to settle its loan within five to 10 years, compared to the longer duration of 10 to 20 years that it allows graduates to pay back.

“It has to pay RM500mil in 2008; RM1.5bil in 2013; RM3bil in 2010; and RM500mil in 2014,” the report stated.

It said PTPTN, however, managed to collect only 16.6% of loans in 2004; 44.8% in 2005; and 44.2% in 2006.

Meanwhile, 10.6% of borrowers applied for deferment in 2004, 8.2% in 2005 and 8.6% last year, the report said.

Last year, PTPTN approved RM18.36bil for 949,527 students, of which 738,027 students were from public higher learning institutions (RM12.77bil) and 211,500 from private higher learning institutions (RM5.59bil), the report stated.

The AG also found that PTPTN failed to claim RM8.66mil, as there were 741 students who died from 2000 to 2006 and their loans were not insured.

The report also found that the loan amount of RM15.94bil given out in the six years was still not insured although PTPTN had been deducting the students’ loans.

“The loans were not insured because PTPTN was slow in appointing an insurance company and was looking for a reasonable premium rate,” said the report.

PTPTN replied that it had offered a contract to an insurance firm in January this year until 2012.

The report also found that PTPTN paid RM5.59mil in advance to 4,183 students who did not apply for a loan.

PTPTN pays out RM1,500 in advance to students whose parents earn less than RM2,000 a month, to ease their burdens, the report said.

The report also said until December last year, 430,763 students should have paid RM873.19mil but only 179,786 students paid RM385.57mil (44.2%).

It said PTPTN waited between 37 and 43 months to send out reminder notices to 300 graduates who have not been repaying their loans.

The report stated that PTPTN published the name of 499 dodgers in newspapers and 255 of them later agreed to pay back their loans.