Repayment problems at PTPTN stem from low- and middle-income strain and deliberate non-payment by some high-income borrowers.
PETALING JAYA: Economists say repayment issues under the National Higher Education Fund Corporation are driven by financial strain on low and middle-income households and borrowers who deliberately delay or avoid instalments despite having the means to repay.
Universiti Teknologi Mara economist Dr Idham Razak said borrowers in the low and lower-middle-income brackets face the greatest strain, as rising essential expenses outpace wage growth.
“In the context of rising living costs, the low-income and lower-middle-income groups are the most pressured to make repayments because a large portion of their income is used for basic needs, such as food, rent, transport and monthly commitments.
“Factors such as inflation, increasing housing costs and family commitments further narrow their financial space, causing repayments to be delayed.
“The middle-income group often bear a heavier repayment burden compared with the B40 or high-income groups. This is because they are in a ‘policy gap’ in which their income appears sufficient, but their actual commitments result in very limited disposable income.”
He said high-income defaulters usually fail to pay because of behaviour rather than financial limitations.
“The phenomenon of high-income borrowers who still fail to repay despite having financial capability usually stems from behavioural factors rather than economic constraints.
“Some postpone repayment due to a lack of awareness about social responsibility, not viewing it as an urgent commitment or assuming no strict action would be taken.”
Echoing a similar perspective, Universiti Putra Malaysia Putra Business School senior lecturer Assoc Prof Dr Ida Md Yasin said repayment outcomes cannot be judged solely by income groups and are shaped as much by personal behaviour as financial constraints.
“There are two types of borrowers. The first are those who understand they took a loan and know they must repay it.
“The second are those who simply do not want to pay and will try to avoid it as much as possible.
“Sometimes, repayment issues are not solely about life circumstances, but also about attitude. There are people who, even if they have the means, still do not want to pay.”
She said classifying repayment struggles based on B40, M40 or T20 categories is often misleading because household circumstances vary widely.
“It is difficult to categorise by income group because every family has different commitments. Someone in the B40 category but living alone may be perfectly comfortable.
“But someone in M40 earning RM8,000 with young children in school, childcare costs and various other expenses would naturally have far higher financial pressure. So, the burden depends on income and expenditure.”
She said the corporation’s repayment structure is “far more lenient than banks” and the policy debate should consider whether enforcement should remain soft or become more stringent.
“If a bank loan is not repaid, a person could be declared bankrupt and their financial future is destroyed. The corporation does not go to that extent.
“Banks have collateral and can seize houses or assets if instalments are not paid. The corporation has no such mechanism. What they can do is continue to ask borrowers to repay. If many do not repay, the fund becomes smaller and future students would not be able to receive financing.”
Ida added that the debate ultimately ties to a larger national question about how Malaysia finances higher education.
“The fund is just a tool to provide educational loans at low interest. In Germany, higher education is free not only for citizens, but also for foreigners. In Malaysia, education is free only up to secondary school.
“If the country has the capacity and can manage its finances well, free higher education is not impossible,” she said.
Higher Education Deputy Minister Datuk Mustapha Sakmud on Monday revealed to Parliament that borrowers across all income groups continue to accumulate significant outstanding debt to the corporation.
The outstanding amount includes RM257.56 million owed by households earning above RM8,000 and RM10.23 billion among Sumbangan Tunai Rahmah-recipient families.
He added that repayment exemptions remain limited to B40 and M40 public university graduates.
