Is PTPTN A Burden For Young Generation YoungMoneyTipscom
A survey has been conducted in order to find the financial problems faced by the young graduates in Malaysia. We came out with a questionnaire that consists of questions such as monthly income, debt level, academic qualification, sources of income and investment planning. As a result we found that majority of the fresh graduates are facing difficulty in paying their debt.
PTPTN plays a major role which is about more than half of the respondent (55%) is unable to pay back the loan due to insufficient salary, unexpected expenditure and high commodity cost. But the problem is, those fresh graduates have to start paying the loan 6 months after graduation date in order to avoid several consequences.
According to the statistic on Sept 2013, Second Deputy Education Minister P. Kamalanathan stated that about 1.33 million PTPTN loan holders with a total loan size of RM2.11 billion have been blacklisted by the Immigration Department since they are fail to pay back the loan within given time. Those blacklisted will be unable to go abroad or renew passport.
So if you are unemployed currently after graduate, make sure you approach your situation to the Deputy Education Ministry because they provide opportunity for the borrowers to defend themselves before categories into blacklist. Read more on: http://www.freemalaysiatoday.com/category/business/2013/11/15/over-100000-ptptn-loan-holders-to-be-blacklisted-by-immigration-department/
As a student or fresh graduate how you going to solve this problem if you are a PTPTN borrower?
Here are some ideas and tips we would like to provide you in order to solve your debt problem.
1. Score well in studies
Education is the key to unlock the golden door of freedom
(George Washington Carver)
IPTA students who obtaining Bachelor Degree with first Class Honor and students from IPTS that attended course has been accredited by MQA are eligible for exempted from the education financing repayment. This is only applicable for the students who completed their Bachelor’s Degree with First Class Honors and not for Diploma program. So those who had completed diploma or foundation, try to score well in your degree program in order to obtain this benefit. You will get exemption and it became a scholarship for those who obtain Bachelor Degree with first Class Honor. In order to apply for PTPTN exception, you should provide several documents as stated below.
- Copy of the Bachelor’s Degree scroll with First Class Honors or equivalent
- Copy of the academic transcript
- Verification letter of the First Class Honors
- Application form and Akuan Penerima Biaya for exemption of repayment
2. Discontinue your loan
Sometimes, students who did diploma will be qualified for 1 year exemption when they go for their degree; meanwhile they will be entitled to get loan for their whole course. For example, a diploma student who jump into second year of degree will get additional I year PTPTN amount since it is a 3 years program. But he will be able to complete his studies in two years’ time due to the exemption.
When you get exemption, try to pay back the loan with the balance PTPTN amount in your account since you are completing your studies earlier. The students also can discontinue their loan by writea letter to Perbadanan Tabung Pendidikan. By this you will have fewer amounts to be paid at the end and also can avoid the interest. Download your loan repayment exemption form at:
3. Apply for Ujrah
In 2010, PTPTN finalized that those who borrowed loan before 2008 can apply for Ujrah loan which replace the existing fixed administrative cost rate of 3% or 5% per annum to 1% flat rate per annum. The new 1% Ujrah is announced in order to reduce the interest paid for the study loan by converting 3% interest to a 1% Ujrah based loan. All you need to do is submit your e-mail and IC number to PTPTN website and once your request is approved, a notification email will be send to you. The applicant will be given a period of 90 days to consider whether they want to convert to the new scheme or not. So you have to reply them within the time period.
4. Do repayment through salary reduction
Sometimes it is hard for youngsters to save a particular amount for paying their debt since we like to buy trendy items and spend more for entertainment. As a fresh graduate who just entered into working life, what action you going to take in order to manage your spending pattern?
Here are some tips for you to manage your money while paying your debt at the right time without any pending payment.
- Do repayment to PTPTN through your salary reduction. By this, a particular amount will be deducted from salary each month. The salary deduction is based on the determined repayment schedule. The amount that the applicant would like to pay must be equal to the amount in the schedule and for those who wish to pay higher amount need to write a letter of acknowledgement to PTPTN to state about your preference.
- If you want to cancel your salary deduction, you can do so under certain circumstances. Recipient required submitting Borang Permohonan Pembatalan Potongan Gaji PTPTN and for those who still have outstanding debt will not be permitted to stop salary deduction. Salary deduction will be discontinued only in the following cases:
a) Recipient has fully settled the debt
b) Recipient is declared bankrupt
c) PTPTN is informed by the recipient or recipient’s employer on termination of service or transfer.
Think twice before you apply for repayment through salary reduction because you not able to cancel the application afterward if you have balance payment. You can get the application form at: http://www.ptptn.gov.my/docs/Borang%20PTPTN/Borang%20Kebenaran%20Potongan%20Gaji%20pin%207.pdf
5. 10% discount on PTPTN loan
PTPTN provide 10% discount on the total payment for graduates who pay the loan continuously for 1 year (12 months) based on the repayment schedule with the National Higher Education Corporation. The discount will be available to them for an unlimited period if you start paying the loans consecutively for 12 months. Other than that, if you have more money currently, try to payback the full loan within 6 months period. So you will be able to can avoid kos upah. More info in:http://www.ptptn.gov.my/docs/Bajet2013/Lampiran%20B%20-%20Bajet2013.pdf
6. Withdrawal from EPF account II
I guess all of you know what EPF is and its benefits. For those who not clear about the scheme, EPF (Employees Provident Fund) is a compulsory savings scheme in Malaysia. There are two accounts in it. Account I will stores about 70% of the members monthly contribution and to provide security for old age retirement. While account II stores 30% of monthly contribution and gives additional benefits to the members to utilize part of their savings to do down payment for house ownership, loan settlement, finance for education and other withdrawal schemes.
If you are already working for few years, you can use your EPF account II money to pay back your PTPTN loan. Thus will help you to reduce your burden and you will be able to get huge amount at one time. So when you use that entire amount to pay your loan, you will be entitling for discount when paying the money.
“This is your life. You are responsible for it. You will not live forever. Don’t wait.”
As a conclusion, I would like to say that it will be good if you study hard and score well in your examinations in order to avoid paying back the PTPTN loan since it will become a scholarship for you when you obtain a Bachelor Degree with first Class Honor. That is the easier way to fully avoid the burden of paying back the loan. If you could not effort to do so, try to pay your loan continuously for 1 year and enjoy the 10% discount from the overall payment.