BUTTERWORTH: Parents can make it easier for their children to settle their study loans by buying into various investment and savings schemes offered by the National Higher Education Fund Corporation (PTPTN).
PTPTN chairman Wan Saiful Wan Jan (pix) said the dividends earned from such schemes could go some way into easing the debt burden that many borrowers face.
While PTPTN’s main focus was to disburse loans to those pursuing higher education, it has since reformed its functions to offer investment and savings schemes to borrowers.
To date, a total of 4.2 million savings and investments accounts have already been opened by parents to prepare their children for higher education. Their total savings amount to RM5 billion.
“Over time, we hope to curtail the rise in unpaid debts incurred by some borrowers,” he said after handing over RM32,000 worth of school uniform to non-governmental organisations here.
It was reported recently that the number of students who require loans from PTPTN is expected to rise from 180,000 now to 250,000 by 2040 as a result of a growing population and rising need for higher education.
Malaysia is one of many countries that are struggling to cope with rising debts from unpaid study loans.
PTPTN has reportedly incurred up to RM40 billion in government-guaranteed debt, which is expected to almost double to RM76 billion in 20 years.
From RM56 billion that PTPTN has disbursed, only 32.5% has been repaid.
Wan Saiful said the dividend amount for the savings and investment schemes for the year will be revealed in six weeks when the latest financial performance of the fund is disclosed but hinted that it could be about 4%, which would be competitive.
Among the incentives from the investment and savings scheme are tax breaks for those who commit more than RM8,000 in their PTPTN savings and Takaful life insurance to cover families who have registered.
For those in the low income group, the fund provides grants to match the total savings in each account.
For instance, Wan Saiful explained, if a family has invested RM1,000, the PTPTN will pump another RM1,000 into the same account.
In the private sector, employers will get tax breaks if they offer to help their employees settle their loans either in full or partly.
“There is a need to inculcate a healthy habit among young families to begin saving and investing for their children’s education from the early stage,” Wan Saiful said.
