On the Beat | By Wong Chun Wai

Study loan defaulters are plain selfish

Equally disgraceful is the revelation that the corporation given the task of running the scheme has not been able to recover the money effectively. The corporation ran out of funds in 2003 and had to borrow RM2bil from the Employees Provident Fund. In short, the Government had to use our money to rescue the corporation. In total, the PTPTN has disbursed RM7.2bil since its inception in 1997.

The scheme was introduced with the aim of assisting needy students. Almost all students of higher learning institutions, including those from well-to-do families, have enjoyed the scheme.

Last week, corporation chairman Datuk Razali Ismail reportedly said that more than 200,000 reminders had been sent out to the 190,000 defaulters this year. They owed RM420mil, of which RM93mil was recovered.

But something is not right here. The corporation ran out of money more than a year ago. Surely, it must have seen the enormous problem it was heading towards, yet it did not change its approach.

The corporation should be rapped on the knuckles as much as the errant loan holders. The people who have been given the task of running the corporation have obviously failed in their task.

The Prime Minister has bigger things to worry about. Instead, the Cabinet had to spend an entire morning discussing how to handle this financial fiasco brought about by selfish graduates and inefficient officials.

Obviously, one major factor is the poor system of loan recovery. If the reasons given by some defaulters are to be believed, then the corporation must review its method of debt collection.

One civil servant, who graduated from Universiti Malaya, said she took the initiative to go to the PTPTN office to find out about repaying her loan because she did not receive any notification from the corporation.

A family member who sent a cheque for RM150 as monthly repayment related that the corporation only cleared it five months later.

Teacher Betty Tan complained that she had RM197 deducted monthly from her salary for the past two years to repay the PTPTN but its records show that she has only made two payments.

Another recipient complained that she only received part of her loan of RM12,000. She wrote to the corporation but did not get any reply. Her phone calls were also to no avail.

Following press reports of the huge debts, PTPTN has proposed several actions to recover the loans. These ideas should have been thought of before the funds were given out, not after the scheme had almost collapsed.

In the private sector, such poor recovery of debts would not be tolerated and officers in the financial control department would have been dismissed for not doing their job.

Tough words have been used by our politicians and real action should be followed. The warnings would come to naught if no concrete action was taken to recover the money.

The public will not take such sound bites seriously if they think they can get away scot-free. They read about the government wanting to act against those who dodge National Service but no one has been charged in court.

It might be a good idea to link up PTPTN with the Inland Revenue Department. In the income tax assessment forms, it might be necessary to declare whether contributors had taken any government study loans and whether they had repaid them.

The PTPTN loan defaulters may be the news but over 50,000 Mara loan holders owe the agency more than RM209mil and they include senior civil servants and senior executives in private companies. In its bid to recover the amount, Mara has published the names of nearly 3,000 defaulters in newspaper advertisements.

There is a simple reason why many of these defaulters do not bother to repay their loans – they think that as long as it's government money, they need not pay up.

It is time for the Government to stop being lenient if it wants to be taken seriously.