Due to the challenges of recouping student loans from loanees that have entered the workforce, the Malaysian government is now considering making salary deductions compulsory for PTPTN defaulters.
This was revealed in the Prime Minister, Datuk Seri Anwar Ibrahim’s speech at the National Higher Education Open Day. Hi speech was read by deputy Prime Minister Datuk Seri Fadillah Yusof at the closing ceremony yesterday.
Proposed repayment via ICL
In his speech, Anwar said that the monthly salary deductions would be made through the Inland Revenue Board. This follows from a recommendation made by the National Higher Education Policy Review Committee (NRC).
NRC was first formed early this year, in January, Its main task is to reform the higher education sector of Malaysia.
“This Income Contingent Loan (ICL) implemented via automatic salary deductions made by the Inland Revenue Board (LHDNM) is seen as the most practical and least-burdensome proposal for loan borrowers to settle their debts,” said Anwar in his speech.
RM66.9 billion owed by borrowers
According to Anwar, as of May, RM66.9 billion is owed to PTPTN by its borrowers.
“We are concerned about the long-term sustainability of PTPTN and the future of future students, should this persist.
“If this amount is paid, it can support nearly 2.5 million new student tertiary education loans,” said Anwar.
Anwar’s reveal follows several incentives announced during Budget 2024’s tabling to help promote PTPTN repayments.
During the tabling, Anwar announced that PTPTN borrowers will enjoy a discount on their loan repayments from October 14 until March 31, 2024.
Read More: PTPTN Loan Repayment Guide
