Frustration over defaulting PTPTN borrowers puts spotlight on another past PH campaign

A minister's recent warning to National Higher Education Fund Corporation (PTPTN) borrowers who have defaulted on their loans is likely to trigger further negative reactions to the government, joining a string of unfulfilled election promises by Pakatan Harapan (PH), Prime Minister Anwar Ibrahim's coalition that leads the current administration.

Last week, Higher Education Minister Zambry Abd Kadir issued a reminder to some 430,000 borrowers who have yet to make a single repayment, saying this makes it difficult to continue granting loans to others.

Their loans amount to a staggering RM6 billion, out of the RM40 billion owed to the fund.

Zambry said many of them have graduated for decades.

"This is a category that has not cared since the first day they left (the university). They have never informed us of their situation, where they are working or how they plan to pay," Zambry said.

However, a casual check would show that many of the defaulting students graduated during the same period when PH launched a fierce campaign against the previous Barisan Nasional (BN) government to write off the PTPTN loans, forcing the administration of then prime minister Najib Razak to grant some rebates for high-performing students as well as other concessions to encourage borrowers to repay.

It is therefore not surprising that some comments on social media see Zambry's statement as more of a sideswipe at PH, an indirect reminder of individuals who ran a campaign so popular that it became part of PH's election manifesto, promising everything from lifting the travel ban on defaulters to a longer repayment period that takes into account their current income.

At the centre of the campaign to write off PTPTN loans is none other than Adam Adli Abdul Halim, now the deputy youth and sports minister.

In April 2012, he and other student activists pitched tents in Dataran Merdeka to urge the government to provide free tertiary education, in a protest backed by PKR leaders.

The protest caught the attention of the public as student loan repayment is close to the hearts of millions of adult Malaysians whose tertiary education was funded by PTPTN.

The following month, the issue became the subject of a debate between then Umno Youth chief Khairy Jamaluddin and PKR strategic director Rafizi Ramli.

In 2013, Adam's popularity rose even further after he was suspended from Universiti Pendidikan Sultan Idris (UPSI) for a speech that led to a sedition charge against him.

In 2019, just a year after PH took power, the then PH government appeared to regret lifting the travel ban on some 400,000 defaulters, giving a much-needed boost to the then opposition Umno party, whose previous government struggled to explain why student debt cancellation was not feasible.

Then prime minister Dr Mahathir Mohamad also made no secret of what he thought of PTPTN defaulters, calling them shameless.

Student leader Imran Sulaiman said that part of the blame for the huge unpaid PTPTN debt lay with the current government officials who were actively campaigning for PTPTN loans to be written off.

"We challenge Adam Ali, who was once a prominent figure fighting for the students to the point where he was suspended from his studies, to prove that his past struggle was not just rhetoric or a performance to win votes from the youth," Imran, who is president of the Malaysian Muslim Students Coalition, told MalaysiaNow.

Imran said Adam should take responsibility by coming up with a plan to solve the problem, adding that he cannot now claim not to be involved in the PTPTN saga.

"If he can face the suspension of his studies for years, then he should not be daunted by the bureaucracy of PTPTN whose policy can be changed anytime," he said

MalaysiaNow has contacted Adam for his response.

Economic analyst Amanda Yeo said PH leaders' campaign in the past to write off PTPTN loans had raised false hopes.

"The promises of free education by the then-opposition may have given borrowers unrealistic expectations that their loans would be forgiven or reduced.

"This false hope likely led to complacency, as many borrowers assuming they would not have to repay their loans," she said.

Yeo acknowledged the difficulties faced by Anwar in fulfilling his promise, pointing to the different political blocs that make up the ruling coalition.

"BN, for example, had never talked about abolishing PTPTN loans," she said.

Azmil Tayeb of Universiti Sains Malaysia, on the other hand, believes that the government is responsible for ensuring that access to education is not a burden for Malaysians.

"The neoliberal approach to higher education policy is not sustainable. It is the moral responsibility of the state to provide access to higher education to its citizens without burdening them as these citizens will ultimately contribute to economic and social development," he said.

He called on the government to come up with a plan to cancel student debt.

Yeo said one approach could be for higher education institutions to introduce income-based repayment options for fresh graduates.

"Repayments would be tied to the borrower’s income, making it easier for them to meet obligations without added financial strain. As their income grows by 10-15% over one to two years, the repayment amount could gradually increase by 5-10%.

"For borrowers juggling multiple debts, PTPTN could collaborate with banks to offer debt consolidation plans. These programmes would combine loans into a single, more manageable monthly payment, potentially with lower interest rates, simplifying their repayment process," she said.

PTPTN currently exempts borrowers who have obtained a first class bachelor's degree from payment.

It also offers payment deferment to borrowers who are unemployed or pursuing full-time studies.

Borrowers can also restructure their loan according to their means, with repayment period extending up to the age of 60, as well as a minimum monthly instalment calculated based on 5% to 8% of gross income.