KUALA LUMPUR: The decision to blacklist borrowers of the National Higher Education Fund Corporation (PTPTN), including banning them from travelling abroad, is viewed as an immediate solution to address those who are not repaying their loans.
Malaysian Association of Tax Accountants (Mata) deputy president Dr Mohd Fairuz A Razak said that this measure has already been implemented by PTPTN to prevent defaulters from travelling or working overseas.
"Blacklisting for overseas travel is effective for some individuals who wish to go abroad for work or vacation, but it has received criticism from certain quarters who feel that it restricts personal freedom.
"However, from a pragmatic standpoint, this move can strongly encourage defaulters to start making payments so that they are free to travel. It puts pressure on borrowers who are capable of paying but refuse to settle their debts," he told BH today.
Yesterday, Higher Education Minister Datuk Seri Zambry Abd Kadir announced that PTPTN would take action against 430,000 borrowers who have never made repayments, totalling RM6 billion.
He expressed concern that the irresponsible attitude of these individuals has put PTPTN's financial position at risk, noting that some defaulters have graduated decades ago without making a single repayment.
Commenting further, Mohd Fairuz suggested that restrictions could also be placed on defaulters from applying for other loans, such as housing, personal, or vehicle loans.
He said that this would be a more effective measure, as these financial aspects are generally considered more significant.
"If borrowers fail to settle their PTPTN debts, they may face difficulties in conducting other financial transactions. It provides a strong incentive for borrowers to clear their PTPTN loans to ensure they qualify for more critical financial matters in the future. This approach is subtler but effective," he said.
He added that for borrowers who wish to settle their loans early or who consistently make payments, PTPTN could introduce more incentives, such as discounts on the loan amount or reduced interest rates.
"This measure has the potential to encourage more borrowers to settle their loans faster, especially those who can pay but need a little extra motivation. This is a long-term approach that educates the public on financial responsibility," he said.
Another step that could be taken, he noted, is to classify borrowers based on their financial ability.
"PTPTN can identify borrowers who genuinely cannot repay due to financial difficulties and provide them with leniency in the form of payment deferments or more flexible repayment plans. For borrowers who are capable but deliberately refuse to pay, stricter actions can be taken," he said.
He said that detailed measures to address the growing PTPTN debt problem could include introducing debt restructuring programmes.
This would allow borrowers to restructure their loans, making repayment more flexible and aligned with their financial situation.
"Through restructuring, borrowers can opt to lower interest rates, extend repayment periods, or choose a new, easier repayment scheme. This helps reduce the immediate financial burden and prevent payment defaults while also maintaining a better credit record for borrowers," he said.
Additionally, PTPTN could introduce income-based repayment schemes, partnerships with employers, financial assistance for struggling borrowers, and financial education initiatives.
"PTPTN also needs to regularly review their loan policies, considering changes in the national economy, inflation rates, and the financial situation of borrowers. This includes re-evaluating interest rates, repayment terms, and deferral benefits," he added.