LETTER | Over the previous weekend, I lost a friend whom I had known for over thirty years. On Saturday night, he told his wife that he had difficulty in breathing. A few hours later he was called to meet his Creator.

Next day after the final prayers, a relative of the deceased came forward to seek forgiveness for the latter and if he had owed anyone and for them to claim from the family. For Muslims, when the borrower dies, all of his debts must be paid off first and the lender has first priority over the wealth of the deceased borrower.

In fact, the longest verse in the Quran is in surah Al Baqarah, ayat 282. It talks about debts/transactions involving future obligations. Allah teaches us to write down and record the facts, to avoid future disputes. Prosecuting poor debtors is forbidden and the demand for repayment should be postponed until they are in a better situation.

In the present context, a big discussion now is on the National Higher Education Fund (PTPTN) and the huge outstanding amount owed by borrowers.

The PTPTN is a rolling fund. According to The Edge’s compilation of federal government loan guarantees between 2008 and 2016, the largest portion was for PTPTN. It increased from RM11 billion in 2008 to around RM40 billion in 2016.

Let us look at the “real” outstanding amount and how to arrive at a solution.

In August 2018, the prime minister said we had accumulated RM39 billion in unpaid PTPTN loans and this was almost equivalent to the total debts suffered by the scandal-riddled 1MDB. A month later, he quoted a reduced figure of RM36 billion and said the defaulters were damaging their reputations and their community. He added this negative attitude stemmed from the defaulters being "untrustworthy".

Five years earlier, in October 2013, the then second deputy education minister reported that there were a total of 425,792 borrowers who had RM4.69 billion worth of repayments outstanding.

In March 2017, it was reported that since PTPTN was established in 1997, up until January 2017, RM48.7 billion was disbursed and it should have collected RM18.8 billion back but managed to collect only RM10.8 billion. About 663,000 students owed a total of RM4.7 billion have not repaid at all.

On Nov 14, 2017, in Parliament, the then Higher Education Ministry reported that a total of 410,500 borrowers owed PTPTN RM6.8 billion and the sum involved a total of RM2.8 billion from borrowers who had never paid a single sen back.

The remaining RM4 billion was arrears from those who were paying up their dues but less than the agreed instalment amount. On average, bumiputra students owed RM6,800 per person and non-bumiputra, RM6,300 per person.

A simple analysis of the above facts and figures shows that the issue has been blown out of proportion.

As at October 2013, defaulters who have not paid at all numbered about 426,000 owing RM4.7 billion. In March 2017, it increased to 663,000 owing the same amount of RM4.7 billion. Six months later, the number decreased drastically to less than 410,000 owing RM2.8 billion.

We have to take cognisance that 96 percent of students who had completed their studies between 2014 and 2016 were listed in the Central Credit Reference Information System (CCRIS) for not repaying their loans. And one out of five remains unemployed of the more than 250,000 graduates produced every year.

Why were they not unemployed? It is said because more than half of the graduates took simple courses such as arts and social sciences, had a poor command of English and some asked for unrealistic remunerations. What was the role of the Higher Education ministry then? Were they not aware of these problems?

There was also talk of private universities taking advantage of easy loan availability by offering courses that add little value and not make students any better off even after they graduate. Again, where was the Higher Education ministry?

So, Mr Prime Minister, it may be easy to say that you are ashamed and the defaulters are damaging their reputation and their community but can you put all the blame on them when we have a messed-up education system?

Some may say the defaulters are able to pay for their car and housing loans as well as credit cards but are not paying off their PTPTN loans. What is more troubling is when some say the top reasons for the non-repayment were nonchalant attitudes and the perception that the government would always step in irrespective of the repayment rate.

I will accept the above comments on condition PTPTN discloses the number of defaulters giving those excuses or justifications. I have tried to research this matter but to no avail.

Some say the monthly handphone bill of most graduates is more than what they are required to payback but a handphone is a necessity in today’s world.

I hope PTPTN is aware that the average monthly income of employees, based on the 2016 Salaries and Wages Survey Report by the Department of Statistics is less than RM2,500. Malaysia’s national poverty line income (PLI) is RM800 but that has not been reviewed for some time. The median income for the bottom 40 (B40) in 2016 was RM3,000 and differs from state to state. Also, less than 10 percent of the Malaysian workforce are earning enough to pay income tax.

We should also not ignore the escalating costs of living resulting from inflation, the slow wage growth and the ringgit’s diminishing value. In short, some or many of the PTPTN defaulters could very well be paupers.

Stopping the PTPTN scheme is not an option because of the impact it has on local politics. It has allowed many from poor families to obtain degrees and start building a career.

What I fail to understand is why the government is willing to provide tax amnesty with reduced penalties for those who fail to declare or pay their taxes. This is for errant taxpayers who can afford to pay but do not, Instead the government is coming down hard on PTPTN loan borrowers.

I am not trying to justify PTPTN defaulters but more for the government to have a re-look on how best to solve this headache created by several parties.

What say you ...

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