KUALA LUMPUR: The suspension of repayment of loans from the National Higher Education Fund Corporation (PTPTN) for those earning less than RM4,000 must be seen as a short-term measure as the policy cannot be sustained.
Economic analyst associate professor Dr Madeline Berma said the government could not allow loan defaulters not to settle their debts.
She said while the government’s intention to give some “breathing space” to fresh graduates was a noble one, it could lead to some taking advantage by hiding their real incomes to avoid paying.
“I fear that delay in the repayment process will lead to the defaulters accumulating more interest, making the amount owed even higher.
“This suspension of repayment is unfair to those who have paid,” she said, adding that it should be noted that apart from the repayment suspension, the government had also removed PTPTN defaulters from the travel blacklist. Madeline said this could lead to a depletion of PTPTN funds, thus leading to fewer students benefitting from it.
“Indirectly, this reprieve is tantamount to encouraging borrowers not to pay back their loans,” she said.
Consumer Finance Expert associate professor Dr Mohamad Fazli Sabri has suggested that the government revise the loan agreement to enable defaulters to repay their loans.
“This issue of PTPTN borrowers not paying back has been going on since 1997.
“We need to relook at the whole issue and ask why people can repay their bank loans but not PTPTN loans.”