Discounting PTPTN

Loan
Loan (Photo credit: Philip Taylor PT)

According to the recently tabled government budget for 2013, amongst the many goodies given out to the young adults is a gem – the discounts being given on PTPTN loans.

PTPTN study loans became a sticking point this year when some groups asked for the writing off of all PTPTN loans and the dismantling of a system that was accused with pushing fresh graduates onto the downward debt spiral. This ensured that the PTPTN issue would become a hot election issue in the coming GE13.

However, I have to tip my hat off to the government for how they chose to handle the issue.

The government announced a one-time 20% discount for those who are able to repay their loans in a lump sum payment and a 10% discount for those who are paying off their loans regularly. When I heard it announced on TV last week, I was shocked by the brazenness of it all.

In one fell swoop, the government ensured that it would collect on a sizeable amount of revenues next year. This much needed income was important as the government was handing out election goodies to almost every segment of the electorate except me. Someone had to pay for it all and PTPTN loans were one way to do it.

According to various numbers, the amount of outstanding PTPTN loans were between RM30-RM48 billion in total. If only a fraction of these people decided to take up the 20% discount to repay their debts in full, we’re talking about collecting billions in revenues next year.

Unfortunately, in the same step, the government has ensured that problems that plague PTPTN in collecting on its loans will continue. Malaysians now know that when the government needs money, they will dole out discounts on everything from traffic summons to student debt. Therefore, there is absolutely no incentive to pay up loans nor debts to the government.

On the other hand, the rakyat are now given the incentive to wait – for Mega Sales! PTPTN defaulters everywhere should learn a lesson from this – to never repay your loans and to force the government to beg for money. This is the wrong message to send. PTPTN can forget about ever collecting any debt again.

What kind of nation are we building up – where one can borrow money from the government, and expect to get huge discounts when the government is in need of cash – a nation of law breakers and free loaders. Personally, I think that this move thoroughly stinks of irresponsible government.

Our PM even had the cheek to comment on the PR’s suggestion to cancel all PTPTN debts. To me, that’s essentially the pot calling the kettle black. Neither action is a responsible one and gives people the incentive to refuse to pay back debts.

Debts must be repaid – in full, and on time!

Published by

Shawn Tan

Chip Doctor, Chartered Engineer, Entrepreneur, Law Graduate.

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