MCA Youth Secretary-General Saw Yee Fung has urged the government to impose tighter restrictions on borrowers who fail to repay their PTPTN (National Higher Education Fund Corporation) loans.
She proposed that defaulters be barred from applying for housing and vehicle loans, claiming current enforcement like overseas travel bans are insufficient to discourage non-payment.
“Only stronger consequences will get results,” she said.
What is PTPTN and why the pressure is growing
PTPTN was launched in 1997 to provide affordable study loans to Malaysian students pursuing tertiary education. Over the years, millions have benefited from the scheme.
According to official data sighted by NST, a total of 417,192 borrowers have been classified as defaulters, having failed to make payments for 12 months or more.
This group alone owes a staggering RM9.55 billion in unpaid loans.
This growing number of defaulters has forced the government to rethink its approach, especially as PTPTN relies on repayments to continue supporting new students.
The loan scheme was designed to make higher education affordable, but low repayment rates now risk its sustainability.
Salary deduction system proposed
To resolve the issue long-term, Saw suggested a payroll deduction model where monthly repayments are automatically deducted based on income levels, similar to how monthly tax deductions (MTD) work.
She also encouraged government agencies such as the Inland Revenue Board (LHDN) and the Immigration Department to coordinate more closely with PTPTN for stricter enforcement.
Travel ban removal sends wrong message
Saw criticised a recent announcement by the Deputy Higher Education Minister to lift travel bans for PTPTN defaulters.
She said this move sends the wrong message and could reduce trust in the government’s seriousness on the issue.
She added that borrowers who can afford to travel abroad but still avoid repayments should not be let off easily.
We must also define clearly who is considered a high-income defaulter to ensure fairness,” she said.
