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'PTPTN salary deduction proposal had implementation issues'
Published on: Thursday, November 02, 2023
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'PTPTN salary deduction proposal had implementation issues'
Former PTPTN board member Ong Kian Ming says objections to the proposed income contingent loan repayments for borrowers are not primarily about the concept itself.
PETALING JAYA: A former deputy minister says past objections to the proposed income contingent loan repayments (ICLR) for the National Higher Education Fund Corporation (PTPTN) were not primarily about the concept itself, but rather its implementation.

Ong Kian Ming, who was a deputy international trade and industry minister, said the concerns raised in late 2018 revolved around the proposed ICLR’s impact on borrowers.

“The proposal to significantly reduce the amount of loan repayment for those earning below RM2,000 per month also included increasing the monthly repayments of those earning higher salaries,” he said in a statement today.

“This would have meant a big jump in monthly repayments for those earning above RM4,000 per month, for example.”

Ong served as a PTPTN board member from June 2018 to January 2020.

His statement follows Tasek Gelugor MP Wan Saiful Wan Jan’s recent criticism of Prime Minister Anwar Ibrahim’s proposal to collect student loan repayments through automatic monthly salary deductions.

Wan Saiful said he mooted a similar proposal when he was the PTPTN chairman in 2018, but it was then objected to by Anwar and Johor Bahru MP Akmal Nasrullah Nasir. The initiative was later postponed.

Currently, repayment of PTPTN loans through salary deductions is voluntary.

Ong also said ICLR could have been introduced more gradually with consideration to varying income brackets and only applied to new PTPTN recipients.

“New borrowers would know about the ICLR right from the start and not be shocked by higher repayment rates if they were to earn a higher salary soon after graduating,” he said, adding that they could then manage their finances effectively.

The former Bangi MP proposed additional solutions, such as scrutinising certain PTPTN loans with higher repayment rates, and collaborating with debt collection agencies to enhance repayment rates.

However, he disagreed with Wan Saiful’s suggestion to place PTPTN under the purview of the finance ministry to operate more like a financial institution.

“This would detract PTPTN from its original purpose as a lender to students for higher education, especially for those in the B40 category,” he said.

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