The Penang state government will consider subsidising the difference for students from Penang if they have their National Higher Education Fund Corporation (PTPTN) loans slashed as reported in a Chinese daily today.

 

Penang Chief Minister Lim Guan Eng ( left ) was referring to a report from Sin Chew Daily that claimed that PTPTN loans will be slashed by five percent for public universities and 15 percent for private universities.

 

"Penang will consider, after looking at our budget, to fund the amount that is the differential. But first, we need to look at it," Lim said, adding that he might make a decision on the matter before Penang tables its state budget on Friday.

 

However, Lim also urged the federal government to drop any intention of slashing the loans, saying that it will add to the rising costs of living.

 

"I urge the government to not reduce the loan amounts. If we decide to add loans, it will only be for Penang students. What about the students nationwide?" he asked.

However, in the Dewan Rakyat later, Education Minister Muhyiddin Yassin confirmed such considerations but gave an assurance that it would not have a big impact based on the ability of the children’s parents to pay the fees.

“We are still considering all options. If we can’t find a solution, we might have to decrease the loan amount,” he said.

He asked opposition politicians to help the ministry recover all the unpaid PTPTN debts, stating that the ministry is servicing the interest for the PTPTN funds, which he said comes from external sources as well.

“So the students have to help share these costs as well,” he said.

PTPTN confirms cuts came into effect last Saturday

He also said that the ministry had to consider such options because the amount of PTPTN applicants is also increasing and the government “can’t cope” with the increasing applicants and the

unpaid debts.

Late this evening, Bernama quoted PTPTN as saying it decided to reduce the amount of funding for students in higher learning institutions due to lack of funds because many borrowers failed to make their repayments on schedule.

Its chairperson Shamsul Anuar Nasarah ( left ) said PTPTN required RM5 billion annually to provide loans to students in higher learning institutions, and the unsatisfactory repayment performance had affected its funds.

"This is the effect when many borrowers do not repay their loans," Shamsul said.

He said the total PTPTN loan repayment received up to Aug 31 this year was RM5.37 billion or 45.62 percent, while the actual amount that the corporation should receive was RM11.77 billion.

"The number of borrowers who have never made repayment for their loans is 552,638 people, involving RM4.21 billion," Shamsul said in Kuala Lumpur.

He added that the PTPTN loan cut of five percent for students in public institutions of higher learning and 15 per cent for those studying in private institutions of higher learning came into force

last Saturday.