The Penang government is seeking to recover debts totalling RM6.9 million from students who took loans for their studies but are yet to repay their loans despite being issued demand letters.

NONE Chief Minister Lim Guan Eng ( left ) said that as of Monday, only 6,429 students have made their payments, while another 1,564 are yet to settle their loans.

Describing the latter as "hardcore debtors", Lim said this group of students, who have not made good their payments over 15 years, currently owe the state RM6,870,806.68.

"Action will be taken against the debtors, which includes, legal action and publication of their names in all the major newspapers in the country," Lim warned.

"We have exhausted all avenues to collect the arrears, which include issuing notices, publishing their names in government portals, and visiting the homes of defaulters," he told reporters in Penang yesterday.

"We managed to find their addresses through the National Registration Department, Public Services Department, Election Commission, Transport Department and from the various ministries and government departments," Lim added.

Scholarships from the state government have been available since 1970. Applications can be made online from May 2 to July 31 every year and are available to those applying to public and private universities.

sos damansara graduation 021105 group Lim, who is also DAP secretary-general, said the decision to recover the debts was made at a meeting of the state scholarship and loan board on Monday.

New loans for the 2011-12 session, totalling RM1,359,500, have been released to 353 students, he added.

Lim said failure to repay the study loans would jeopardise opportunities for other students to receive loans and scholarships in the future.

"The money collected from loans that have been settled is used to provide financial assistance to certificate, diploma, graduate and PhD holders," he added.

Based on the 2008-11 records, Lim said, 31 students were allowed to upgrade their loans to scholarships worth RM305,500 as a result of their excellent performance, achieving first class or or getting a CGPA above 3.67.

Lim also encouraged students who suffered from critical illnesses to apply for exemption from payment.

Since 2008, six students have been exempted from such payment, amounting to RM43,003.03, he said.

The state government would also waive the interest for those who settle their loans in a lump sum.