This article first appeared in The Edge Malaysia Weekly on March 17, 2025 - March 23, 2025

Several politicians last week rightly voiced support for Malaysia to reintroduce the travel ban on those who do not make an effort to repay their National Higher Education Fund Corp (PTPTN) loans.

In fact, more can be done to get defaulters to repay PTPTN loans, given that the government will soon be retargeting RON95 fuel subsidies and it knows who the non-payers are.

The PTPTN problem is not new and the sum involved is huge because some politicians previously chose to pander to certain factions of the electorate. More than RM10.85 billion was outstanding from 1.2 million borrowers as at end-2023, with arrears ranging from less than one year to more than 12 years.

Higher Education Minister Datuk Seri Zambry Abdul Kadir last week rightly reminded politicians to refrain from promising to waive PTPTN loans. Fellow Dewan Rakyat member Datuk Mohd Hatta Md Ramli also cautioned against including PTPTN loan waivers in election manifestos, relating how such talk resulted in some people “choosing not to pay for another three years, believing that the government might introduce a waiver in the next election”.

Going easy on graduates who wilfully renege on their obligations is bad parenting by policymakers, one that creates deeper behavioural problems, on top of being a drag on fiscal resources.

Once the door on PTPTN loan waivers is firmly closed, graduates with low-paying jobs may be more motivated to enrol in upskilling programmes, enhancing their prospects for better employment and improving their ability to repay loans. That approach would be better for both their well-being and government coffers.

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