Tuesday, May 08, 2007

Dewan Rakyat: Barring loan defaulters from leaving ‘last resort’

2007/05/08
Dewan Rakyat: Barring loan defaulters from leaving ‘last resort’





STOPPING student loan defaulters from leaving the country may sound cruel but it was the last resort as many had been given ample opportunity to pay up, the House was told yesterday.


"This is a last resort when we have exhausted all avenues to recover the debt," Higher Education Minister Datuk Mustapa Mohamed said in reply to points raised during the debate on the National Higher Education Fund Corporation (Amendment) Bill.Several members of the House had cried foul over the clause which allowed the National Higher Education Fund Corporation (PTPTN) to seek police and immigration help to bar loan defaulters from leaving the country.Mustapa said the loan recovery rate had not been encouraging. Up to March 31, the PTPTN had disbursed loans totalling RM19.06 billion to 982,066 students.


He said 438,755 had graduated and PTPTN had collected only 30 per cent of the loans disbursed to them.PTPTN had sent out 61,016 reminders for the third time to defaulters but only received response from 29 per cent, while the response rate for 17,382 letters of demand was three per cent."We have no choice but to resort to preventing the defaulter from leaving the country. It may be cruel but what other choice do we have?" Mustapa said defaulters should not complain if they faced the prospect of not being able to travel."If they can’t repay RM100 a month, how can defaulters afford to travel overseas?"


He, however, gave an assurance that his ministry and the PTPTN were not shutting the door on all defaulters who needed to go abroad. "They can always come to us and negotiate. We may have the measure in place but it does not mean we are unwilling to talk." On measures to continue topping up the fund, Mustapa said PTPTN had stopped converting the loans of students who graduated with a first-class honours degrees to a scholarship from 2005."This was done to ensure the fund continuously received money." The PTPTN receives its funds from three sources: A RM5.2 billion grant from the government and two loans, one each from the Employees Provident Fund and the Pension Fund.


On calls to write off loans of poor students who remained unemployed, Mustapa said by doing this, PTPTN would not be able to replenish its coffers."What these students can do is to seek to defer their loan repayments."


Great move and its a brilliant one, maybe you all should step even one step further, that is to deduct the load automatically from their salary pay like the EPF does.... Great idea isnt it... think aboout it man...






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