Established in 1997, the National Higher Education Fund (PTPTN) has provided financial aids to more than 2.4 million students from both public and private higher learning institutions, with a total amount of RM56.39 billion as of April 2016. The main goal of the fund is to provide financial education support to local students in their studies by partially paying or fully supporting their fees.
Online reports pointed out that as of February 2016, the corporation only collected RM7.9 billion of RM15.8 billion scheduled repayment. In effect, PTPTN had listed 1.25 million borrowers who have yet to pay their loans to the Central Credit Reference Information System (CCRIS) since June 2015. Loan defaulters who fail to repay six months post-graduation are also barred from leaving the country.
Each year, the corporation needs RM5 billion to financially aid local students. The failure to repay these loans will result in more loan cuts for future applicants and rob future generations’ rights to higher education. Inevitably, back in 2014, PTPTN announced that all student loans amount will be reduced by 5% for all public universities and 15% for private tertiary students.
In an effort to increase the rate of repayment, a new discount incentive was announced by Prime Minister Datuk Seri Najib Razak in the recent 2017 Budget. It includes a 15% discount for full settlement on outstanding debt, 10% discount for payment of at least 50% of the outstanding debt made in a single payment, and a 10% discount for settlement through salary deduction or direct debit.
For a full settlement, it is a quick procedure over the counter. Payment can be done via cash, debit/credit cards or cheques and it will take at least three weeks to be processed and cleared.
Employee’s Provident Fund (EPF) also enables contributors to withdraw their second account to make repayments to PTPTN through its online e-withdrawal system. Lenders may also make payments through their parents’ account.
Another easier method would be paying your installments or full payment online with easy to follow instructions available off the PTPTN website. This can be done for either full or partial payments.
Alternatively, lenders can opt for a direct salary deduction through the Inland Revenue Board of Malaysia (LHDN), by bank drafts or mail order through postal service and online payments option offered by most major banks in the country.
Another incentive by the corporation is the option to change your loans to Ujrah scheme for a lower interest rate of 1% as opposed to the originally agreed amount of 3%. Borrowers need to make a minimum payment of 50% of their loan backdates in order to apply for a loan restructuring with PTPTN by filling up an application form and submitting it to their nearest counters.
All negotiations on PTPTN loan settlement or restructuring by the PTPTN loan can be made through PTPTN Care line at 03 2193 3000 or contact the nearest PTPTN branch. You may also check their website: http://www.ptptn.gov.my/ for more details.