ONE of the worrying trends in our education system is the increasing incidence of loan repayment defaults. As of last year, the National Higher Education Fund Corporation (PTPTN) defaulters owed RM39 billion in outstanding repayments.
Borrowers who are mostly millennials are either reluctant or refuse downright to pay back even though they may be gainfully employed.
This gloomy state of affairs set me thinking in terms of how times have changed. I could not help recall the early days (70s) when I had to repay the loan I took from the university. And I did it willing and on my own accord plus some motivation from my late parents
I would like to dwell on two factors that I think contribute to the current state of affairs namely the Influence of parents and the mindset of the borrower.
My dad withdrew his entire meagre EPF savings to pay for my 1st year education at the University of Malaya. Due to my good results in the 1st year, I was successful in getting a university loan for the next two years.
When I got my first pay, I was so excited to give my parents a monthly fixed sum as pocket money after setting aside an amount for the repayment of my loan. But my parents told me in no uncertain terms that my priority should be to settle the outstanding loan and that the money meant for them should be used to pay for the loan. As a result, my loan was settled in quick time, thanks to the great help from my parents!
But look how times have changed from the perspective of both the youngsters and their parents. Some indifferent parents today would leave it entirely to their children regarding the settlement of the loan while others have adopted the attitude “if others don’t pay, why should my son/daughter do so?”. Yes there are also other parents like mine who encourage their children to pay up. But I would think they are in the minority.
The thinking of borrowers has also changed. My thinking at that time was that a loan is a loan and that it is my responsibility as a borrower to pay back the money I had borrowed. I was in fact indebted to the university for giving me the loan in the first place. When I secured a job, I felt that it was my duty to settle my loan obligations as soon as possible.
But now the pampered youth seem to be much less responsible by expecting a free lunch. Many adopt a lackadaisical mindset in that they will settle the loan when it suits them irrespective of the terms of the loan. They behave as if the country owes them a living. Others do not bother at all to start repaying even though they have started working and can afford to do so as “others are also not paying up”.
Hence the recent decision of the government that PTPTN loan defaulters (including black-listed ones) are also eligible to apply for housing loans came as a shocker. If these borrowers are dragging their feet in settling their education loans, what make the government think that the borrower would not do the same for the housing loan?
So perhaps parents should now step forward and do their part in encouraging, advising and influencing their children to pay their dues as responsible citizens. Research has shown that parental guidance, advice and influence have a significant impact on borrowers’ priority to repay educational loans.
The Education Ministry should seriously consider adopting this “soft” approach aimed at the parents of the borrowers.
Pola Singh
Kuala Lumpur
