Paying back your dues

By Hafidz Baharom

If you’ve ever attended a Muslim funeral, there will be one ritual before departing the house with the dead, in which a member of the family will ask if there are any loans to be repaid before the ceremonial continues.

It is the belief that loans unsettled will hamper efforts in the afterlife to gain entry to Paradise.

Now, with that in mind, why the heck do you want to avoid paying back the National Higher Education Fund (PTPTN)?

I support the recent move to stop anyone who has not paid back their PTPTN to take out a car or home loan since graduating.

Truth be told, it hampers the ability of future generations to have the same access to higher education, putting the responsibility solely on government. Whatever is owed to PTPTN hampers it from issuing out more loans to the current and future generation of students.

Meanwhile, those who do not pay can somehow just waltz throughout life, buying a house and a car? Unacceptable.

Yes, we do wish education was free, but you do not just rush headlong into it by abolishing the PTPTN. Instead, you gradually do it by discussing how it should be financed.

The fact that there are those with a study loan who can still even consider owning a house or a car reeks of dodging their debts simply on the basis that they do not have to pay for it without consequence, and in fact will be willing to accrue even more debt on top of that.

Next thing you know, they might even have millions in an offshore account somewhere.

So let’s start with something simple. How can you not have to pay for the PTPTN?

The first way is the simplest; parents withdraw their Employee Providence Fund (EPF) for their child’s education. It will be costly once the parent retires, but it is a considered sacrifice that will leave their child debt free.

The second way, is of course through investments. It is clear cut these days that more and more parents are in fact investing in unit trusts simply for the fact of putting aside cash for their children to further their studies.

The third way, is by going into the higher education institutes and taking PTPTN, and achieving a first class degree. A first class degree will convert your student loans into a scholarship.

And that is subsequently the fourth way, which is to earn good grades for four semesters or less and applying for scholarships from the multitude available out there from government linked companies and even newspapers.

Now, if all these fail to be achieved one way or another, then we go towards paying off your PTPTN.

It has been highlighted by some on social media that the minimum payment of RM50 does not even cover the interest rates and administrative fees on their student loans. This is true, and I hope this is the aspect that PTPTN looks into.

I would in fact consider the following. Firstly, change the minimum payment up to RM100 a month. This will in fact cover the interest, fees and even put down the loan. Secondly, let us suggest that the PTPTN waive the right to fees and interest if those paying back the loans do so for 12 months in a row.

Once this is done, the PTPTN can then inform those paying their loans of the waiver, and ask for an increase in payment by RM50, making it RM150 without any of it deducted out for fees and interest – it goes straight to lowering the loan.

Subsequently, an inquiry to increase by RM50 for each and every year, in line with the salary reviews of wherever they are currently working-salary reviews are at an average of 6 percent.

And if the payment stops, PTPTN issues out a call asking why and if it turns out to be loss of employment, the loan remains as it is with no increase in fees or interest rates until they are reemployed.

To simply remove the loans is insane, and the fact is Malaysians have been having it easy by simply not paying the loans whilst still being able to purchase everything else on credit cards and debt – including cars and houses.

It is time they took responsibility for their education costs as well before even thinking of either of these.

We should not wipe out the debts, but we can surely make it easier for everyone to live with them.

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