PTPTN loans will snowball to RM24b by 2020, says Rafizi
PETALING JAYA, May 30 — A PKR leader warned today that the current tertiary education model will result in spiralling costs and require the National Higher Education Fund Corporation (PTPTN) to approve a whopping RM24 billion in student loans for the year 2020 if the current rate of increase continues.
Strategic director Rafizi Ramli told a press conference that since only RM2.2 billion, or half of scheduled repayments have been paid since the fund was established in 1997, the burden would fall back on taxpayers to cover the accumulated RM177 billion to be disbursed by 2020.
“If the current model that prioritises private higher education will cost RM24 billion by 2020 and cannot be repaid by borrowers, then who will bear the burden of the PTPTN debt?
“We are digging ourselves into a hole. We don’t want to be like Greece or Iceland where they can see what is happening but fail to act until it is at a critical stage,” he said. Greece is at risk of default while Iceland had previously failed to meet its debt commitment.
Rafizi also pointed to the Auditor-General’s report that said the PTPTN, which the opposition and student activists have criticised for saddling fresh graduates with debt, would have a deficit of RM43 billion by 2020 arising from the failure of borrowers to make scheduler payments.
According to PKR, the rate of increase in PTPTN loans since 2005 has been 10 per cent for public university students and 17 per cent for private. It said this showed how private higher education costs are surging out of control.
Rafizi said if the current climb continues, the RM2.6 billion and RM3.5 billion approved for public and private students, respectively, would hit RM7 billion and RM17 billion in 2020.
He said that, currently, the higher education ministry spends RM8 billion on public universities, making the total government outlay for tertiary education worth RM14 billion.
Rafizi added that based on an average cost of RM17,000 per head plus an additional RM5,000 for living allowances, it would cost just RM11 billion to give free education for an increased public university enrolment of 500,000 instead of the current 465,000 students.
This would represent an added RM3 billion over the annual government budget, the he estimated.
“Given that the rate of increase for public universities is lower, we will have greater savings if we focus on them instead of relying on the private sector,” he said.
PKR has insisted that the government could cover the country’s education bill with oil profits, as well as by reducing corruption and plugging leakages in the administration.
But Umno Youth chief Khairy Jamaluddin has claimed that according to Rafizi’s own projections, removing the PTPTN would cost the government some RM185 billion, which, if settled in staggered payments over 10 years, would amount to over RM18 billion annually.