THE National Higher Education Fund Corporation (PTPTN) is ticking time bomb as it fast becoming a burden to the national coffers.
In the last part of the interview, Parti Sosialis Malaysia (PSM) central committee member Sharan Raj told FocusM that PTPTN is now sitting on a loan worth RM60 bil, to date.
“The education fund borrows from the money market, with an interest that needs to be serviced regularly.
“Basically, PTPTN is borrowing money so that it can loan it to students. With more ‘mushroom colleges’ taking money from it, its outstanding loan amount is now staggering,” he said.
PTPTN was established in 1997, after the Government embarked on a massive privatisation programme, which allowed more private players to set up colleges and universities of their own.
With the Government slashing taxes on the super-rich, the Government had to cut back spending on public programmes, including building more public varsities.
This, in turn, spiked fees in public universities. With both the students in public and private varsities unable to pay for their education, the Government set up PTPTN to extend education loan.
When Datuk Seri Najib Tun Razak took over as Prime Minister in 2009, when he mooted the Economic Transformation Programme (ETP), which shifted the Government’s role from education provider to regulator.
Student debt: M’sia not unique
“Due to the ETP, various colleges and universities started to mushroom all over the country, with many of them did not even meet the minimum requirement to be called a tertiary education provider.
“Hundreds of college licences were dished out within the span of two years. A lot of them were located on top of bus stations, in shoplots and I’ve even seen some operating from on top of a mechanic shop.
“They are called ‘mushroom colleges’ and lacked proper facilities, including lecturers. However, the fees imposed were exorbitant,” Sharan said in the first interview.
On that note, Sharan said that graduates from “mushroom colleges” are unable to secure jobs due to skills issue, adding the low wage scenario in Malaysia rendered workers helpless to repay their debt to PTPTN.
“With more students not getting jobs or underemployed, they are not able to pay PTPTN back, leading to poor recovery rate. So, it’s a ticking time bomb.
“But the situation is not unique to Malaysia. Any nations that provide student loans like the US and Australia are facing the same problem,” he stated.
To end the problem. Sharan said: Let’s revert back to the old policy, where the Government played it role as an education provider, instead of just being a regulator.” – April 5, 2021
