Improve administration & enforcement of the National Higher Education Fund Corporation (PTPTN), 9.5.2007.

DAP National Deputy Chairman and MP for Kepong calls on the National Higher Education Fund Corporation (PTPTN) to improve its administration and enforcement, so that it will be able to play a more effective part in higher education.

PTPTN must enhance the coordination with the Inland Revenue Board. Many had hoped that the board would be able to collect with ease the repayments from the borrowers who have graduated from institutes of higher learning.

Dr Tan made the call while taking part in the debate on the bill to amend the PTPTN Act in Parliament on 7 May, 2007.

This bill seeks to amend a few clauses such as to change the memberships of the Board of Management, to receive deposits from a Malaysian citizen and, most importantly, to introduce a new section 22A into Act 566 to empower the Chief Executive to issue certificate to the Inspector General of Police or the Director General of Immigration to prevent any recipient student from leaving Malaysia in certain circumstances especially when an educational loan is not paid or in arrears.

On principles, I agree with the Higher Education Minister Dato' Mustapa Mohamed concerning the stricter action against borrowers who do not pay their debts. We cannot entertain graduates who are not grateful for the loans.

[PTPTN action must be based on compassion and humanitarianism towards those borrowers who are genuinely poor. Can a really poor person afford to go overseas, unless he or she has financial help? Will he or she be ready to pay back in instalments of RM50 or RM100 a month?]

Many MPs took part in the debate on the bill. Although they have differing views, I am pleased that they pay attention to higher education.

On 8 April, 2007, the media reported that the total debts of recipients of loans from PTPTN, Public Service Department and Mara were RM12.5 billion. The minister said that until 31 March, 2007, the debts that should have been collected by PTPTN were RM1.37 billion, involving 438,775 recipients. At the same time, PTPTN had filed summonses in court against 395 defaulters.

It is reported that over 75 graduates of Universiti Tun Abdul Razak (Unitar) complained that they were asked to pay back the loans by PTPTN. [Dato' Mustapa stated that PTPTN sent the money to Unitar, but an investigation had shown that it was not given to the graduates. The university had returned the money to PTPTN.]

It is necessary to streamline PTPTN administration and to improve its enforcement. Although it is reasonable to learn from New Zealand and Australia that had a longer history of student loans, we have to be careful. The conditions in Malaysia are different from those in the two countries. For example, New Zealand has a population not more than 6 million, whereas Malaysia has 26 million. The two nations have been successful in collecting more than 80% of the study loans.

We had hoped that the Inland Revenues Board collect back the loans. In New Zealand, its board is more successful. But, in Malaysia we have to improve the coordination with the board, so that collection can be more effective.

Applicants for PTPTN loans often ask members of parliament to be witnesses. I agree provided that they pay back the loans in the future.

With the measures stated above, PTPTN will be able to play a more effective part in higher education in the country.

(Dato'Mustapa admits that there are weaknesses in the PTPTN administration and enforcement. Hitherto, it has sent 61,000 letters of reminder and 17,382 letters of demand to recalcitrant borrowers, but only a small number has replied. ?4% or 40%.

PTPTN takes 11 steps to collect back the study loans from borrowers. Only after all these have failed, withholding their passports would only be a last resort?)

Dr Tan Seng Giaw