Having dragged its feet far too long, Gerakan Youth wants the government to immediately declare study loan defaulters as bankrupts.

Accusing the government of being too lenient or for according special privileges, its vice-chairperson S Paranjothy said defaulters should be made to pay for denying others similar opportunities.

"Besides barring them from leaving the country, the government should blacklist them when they try to obtain housing and car loans, open a bank account or apply for a business licence.

"The government should also hire a bill collector to recover the loan," he said in a statement today.

"As for loan defaulters living abroad, the relevant agencies should obtain court orders to extradite them to Malaysia and charge them in court."

He urged the Public Service Department (PSD) and the National Higher Education Fund Corp to follow Mara's move in revoking students' admissions into junior science colleges on grounds that their parents were defaulters.

"We should not feel pity and sympathise with the children of defaulters because their parents have benefited from the loan but deprived others to continue their studies.

"If the borrowers had paid up their loans amounting to RM2 billion, the PSD will be able to grant scholarships to all the straight-A STPM and SPM students in the present batch."

The New Straits Times today reported on the government's warning to errant borrowers employed in the public and private sectors, raising the possibility of deductions from their gratuity or Employees Provident Fund.

Official warning

PSD director-general Ismail Adam was quoted as saying that drastic measures had to be taken after repayment notices were continuously ignored.

A total of 14,000 defaulters, 44 of them living and working abroad without having paid a single sen, reportedly owe the government RM284 million.

Ismail reportedly said the defaulters will also forfeit the 75 percent discount on the repayment of the loans, which is interest-free.

This meant that students were required to pay only 25 percent of the total loan sum.

"We are indeed surprised that the PSD decided to give 75 percent discount for an interest-free loan. It's logical if the discount is given on interest charged but it doesn't make sense to give a discount on the principle," Paranjothy noted.

He urged the PSD to penalise the "selfish, ungrateful and irresponsible" defaulters instead of going after the guarantors.

"We are puzzled as to why the government did not institute legal action within a time frame against the 100,000 loan defaulters who owe it RM2 billion.

"The government should review the terms and conditions stipulated in the loan agreement for legal action to be pursued within a shorter period rather than wait for 15 years, and for interest to be charged upon failure to repay within a certain period."

He said taxpayers and the government should not bear the burden of "unscrupulous individuals who are self-centred" who now led a comfortable life and yet refused to pay back the loan.