The decision of the National Higher Education Fund Corporation (PTPTN) to stop offering 100 percent student loans could drive new students to loan sharks, PKR Youth chief Nik Nazmi Nik Ahmad warns.

PTPTN chairperson Shamsul Anuar Nasarah said the fund could no longer afford to give such loans as repayment rates were low.

"Most Malaysians will have difficulty paying for higher education without PTPTN's assistance, and will be forced to borrow from family, friends or worse, loan sharks.

"So I urge the government to review this decision and take measures to resolve the problem in a more holistic manner.

"Don't jeopardise Malaysia's future because of PTPTN and the government's poor management. Correct your mistakes before before punishing the increasingly-oppressed masses," Nik Nazmi said in a statement today.

He said while poor repayment rates was a problem, PTPTN must also consider that many graduates cannot pay because they have yet to find employment or were earning pittance because of the economic slowdown.

Higher living costs also cut into their ability to repay the student loans, he said.

"PKR has for years urged the government to find the root cause for the problem. To date, no such study has been commissioned," Nik Nazmi said.

PKR has been advocating free tertiary education, and threw its weight behind student campaigns to abolish PTPTN loans.

PTPTN has offered various schemes to ease repayment by graduates but has been forced to put debtors on the immigration blacklist to encourage repayment.

Those who graduate with first-class honours are exempted from repayment.

Critics advocating non-repayment of PTPTN loans argue that the interest rate of one percent per annum as well as administration fees charged are oppressive.