Tackling the root: In the AG’s report series 1/2025, PTPTN was advised to review its loan collection mechanism and improve the management of loans. — ONG SOON HIN/The Star
PETALING JAYA: After a shocking finding that more than RM10bil was owed to the National Higher Education Fund Corporation (PTPTN) in 2023 by study loan defaulters, the Auditor-General has urged the fund to review the way it works.
The Auditor-General also suggested a rethink on the mechanism on loan collection and discounts offered on repayment.
There are a total of about 1.2 million debtors, some of whom have not paid their loans for more than 12 years, said the Auditor-General’s report series 1/2025 tabled in the Dewan Rakyat yesterday.
The report revealed that this was the highest outstanding amount recorded by the fund in the past 10 years.
The lowest was RM6.348bil owed by 970,000 borrowers in 2018.
The repayment amount for 2023 was only RM3.553bil.
Since 1997, when it was first started, the fund has disbursed a total of RM71.31bil but still had an outstanding loan balance of RM43.677bil as at December 2023, meaning only RM27.64bil has been repaid in 25 years.
The government had also paid PTPTN RM1.268bil for the discounts offered on repayments.
In the audit recommendation, the Auditor-General said PTPTN should review its loan collection mechanism and improve the management of loans.
This, it said, will reduce the fund’s dependence on loans from financial institutions.
PTPTN has also been urged to review the discounts and the full repayment exemption offered to first class honours students.
The loan repayment between 2014 and 2023, stood at RM26.41bil involving 106.09 million transactions. These payments were collected through several means including direct debit, deduction from salary, EPF and online payment among others.
In 2017, borrowers paid RM5.19bil of RM6.55bil outstanding loans.
“The highest repayment was recorded in 2017 as a result of the Central Credit Reference Information System whereby stringent enforcement was carried out through blacklisting defaulters and mandating compulsory deductions from the salaries of borrowers who were civil servants,” the report said.
However, there was a reduction in collection since 2018 when the enforcement activity was stopped.
In its response to the audit findings, PTPTN said reminders have been issued to 25,257 defaulters as part of enforcement actions.
Notices of Demand have also been sent to 3,580 borrowers as of Dec 14.
“Emails informing 10,388 defaulters on travel restrictions have been sent out since Dec 16, 2024,” it said.
“PTPTN has also formed strategic alliances with federal and state agencies and private sector employers. Through this cooperation, PTPTN has managed to increase the repayment amount by RM120.10mil as at Dec 31, 2024,” it added.
“One of the measures taken by PTPTN to increase collection of unpaid loans is by bringing back the enforcement activity that was stopped in 2018.
“Therefore, the Cabinet has agreed to PTPTN’s application through a memorandum by the Higher Education Minister to bring back the enforcement (activities) of PTPTN loan repayments,” it said.
The Finance Ministry, in its response to the audit report, said it was aware of the RM280.15mil outstanding payment for the period between 2019 and 2023, adding that any funds channelled will be based on the government’s balance sheet.
It added that additional funds would be channelled to cover PTPTN’s cost including discounts and subsidy incentives, SSPN grants and moratorium payments based on the government’s current financial position.
