PTPTN PROTESTS, THE MYTH BEHIND THE IDEALISM

“Never underestimate the power of stupid people in large groups.” George Carlin

By : D.L HONG

A RECENT outbreak of protests from students over their dissatisfaction on PTPTN loans has been met with criticism and false promises. Students are heartfelt although discontented in their requestsforclearing of all student loans, abolishment of the PTPTN loan scheme and provision of free tertiary education. However, anybody without their head in the clouds will realise that nothing is truly ‘FREE’ in this world.

The United Nations Universal Declaration of Human Rights states in Article 26that “Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.”

Has Malaysia NOT complied with UN standards in this regard? What more do the people want?

Such is the insatiability of human nature.

‘FREE’ Tertiary Education – Pros & Cons

Nonetheless, there are always two sides to a story. In THEORY, accessibility to ‘FREE’ tertiary education should produce a highly skilled labour force, which in turn improves local businesses and economic development by empowering people with higher qualifications; thus leading to a better standard of living.

However, reality of the situation is that ‘free’ tertiary education requires financing for operational activities such as remuneration for teaching staff, purchase of materials and property acquisition.Not to mention the fact that thebenefits toSOCIETY of higher education are yet to be proven!

The abundance of jobless graduates is another dire matter altogether.

Sohow do some countries manage to provide such a costly service? The answer is taxation.

With Malaysia’s progressive income tax rate of 26% at the highest bracket, we are a huge margin away from the likes of Denmark, a country who reputably provides free tertiaryeducation,and its 55.4% rate. Public contributions can be invested in a multitude of other socially beneficial activities:improving freePRIMARY education for example.

It does not make sense to devote public funds towards long-term speculative spending on higher education for the masses! Students who are willing to accept the risk of being jobless after graduating should take responsibility for themselves and not expose other tax payers.

PTPTN Truths&Flaws

Conceived as a primarily self-financingfund, the PTPTN scheme is administered at a flat interest rate of 1% per annum, with repayment required from loan applicants after 6 months from graduation or after joining the work force. Unfortunately, such leniency is flawed as PTPTN faces trouble getting defaulters to pay, who in turn are embarrassed and hampered by blacklisting restrictions put upon them.

Sad as the truth may be, dealing with a line of credit is something new and foreign to a majority of relatively inexperienced students. Many teenagers and young adults may not fully comprehend the concept of living on borrowed money.They lack the experience in handling fundamental obligations to debts and arrears such a credit card repayments and home mortgages.

Take for example a credit card which allows the use of cash you do not yet have. Using a credit card involves weighing the risks of foregoing expenditure and your ability to pay by a stipulated due date. When you fail to pay on time, you face being reproved in the form of late fees and higher interest rates. Default on this payment and your credit rating drops, hinderingyour ability to apply for future credit and services. Ultimately, blacklisting and bankruptcy ensues.

Now, apply this example to the students and their PTPTN loans. There is absolutely no difference or duality, other than the fact that the loan enforcement strategies employed by credit card companies are more stringent. In this regard, PTPTN is flawed as there is no secure way to ensure collection.

In a sense, there is too much trust being bestowed upon PTPTN debtors. The scheme is being exploited bypoliticians anda few selfish students who do not understand the future implications of their actions. Students who take these loans agree to a contract of repayment and there is little space for argument when they disagree midway.

Dealing withMoral Bankruptcy

Recent protests and demonstrations are a sickening indicator of the moral bankruptcy of the few who exploit a system that has enabled thousands who have taken their education seriously enough to attain jobs and lead successful lives.

It should be recommended that in order for the PTPTN scheme to work, countering the ‘free-loader’mentality has to be a number one priority. All student loans should be forwarded and integrated with Malaysia’s taxation system or something similar to EPF deductions.

These actions will force anybody who works in a registered business to repay a minimum amount of their student loans without having the hassle of defaulting, whilst still allowing them freedom to service their loans faster in the event of extra income. It also motivates those who are too fussy or unable to find a job to settle with anything, so long as they are able to avoid being black-listed.

By taking accountability of repayments through system integration, the PTPTN may even reduce the current 1% interest rate or eliminate it altogether and provide interest free study loans, as is currently practiced by governmentsof developed nations such as Australia.

Facing Politicisation and the Needs of the Nation

With the current system in place, the abuse of trust and lack of proper enforcement protocols from the PTPTN have created too many risks that will inevitably stunt the growth of the fund, whilst erroneously promoting a false sense of financial freedom to those who do not fully fathom how loans are designed tooperate in the first place.

As elections loom around the cornerwith anger, hate and frustration fuelling politicaldichotomy, public sentiment overrules all other factors when it comes to allocation of limited resources.

Restructuring the PTPTN scheme in face of hoarding politicalpropaganda is by no means an easy task, but it has to be done on the principleof long term development forMalaysia.

In the face of PTPTN criticism, the leaders of our nation must remember that a man who wants to lead an orchestra must turn his back on the crowd.