Find out why students default on loans before making debt recovery proposals, Putrajaya told

Putrajaya should determine why National Higher Education Fund Corporation  (PTPTN) borrowers had difficulty repaying their loans before coming out with proposals to get them to make payments.

Putrajaya had to withdraw its latest plan announced by Education Minister II Datuk Seri Idris Jusoh to list defaulters on Bank Negara Malaysia's bad credit list or Central Reference Information System (CCRIS) after a backlash from student groups and political parties including Umno Youth chief Khairy Jamaluddin.

PKR strategy director Rafizi Ramli (pic) said to date there has never been any information or research on why the students defaulted on PTPTN loans.

Rafizi said Khairy, who is Youth and Sports Minister, had misled students when he announced on social media that the Cabinet had scrapped the plan to link defaulters to the CCRIS."What is the real reason why a majority of the PTPTN borrowers face challenges to repay their loans?" the PKR strategy director said today at a press conference.

He said the announcement gave false hope to students as the Cabinet had only postponed the move to link defaulters to CCRIS.

"He should clear the air whether the move has been scrapped or just postponed," the Pandan MP.

Yesterday, Khairy in a tweet said the Cabinet had rejected the proposal during its meeting this morning.

"Just completed Cabinet meeting. PTPTN would not go ahead with the proposal to list its student loan defaulters under CCRIS.

"Thank you prime minister and education minister for listening to the youth," he said on Twitter.

Student activists angry with the decision had planned  to hold a demonstration to protest the plan to link PTPTN loan defaulters to Bank Negara's credit bureau database.

Adam Adli Abdul Halim, a well-known student-rights activist, said university students did not take the issue lightly, adding that they will not let it go without doing anything.

"We are discussing it. We will definitely protest," Adam told The Malaysian Insider on Tuesday.

Adam, however, pointed out that the ministry's move showed that the PTPTN was never set up for the students' welfare nor help anyone, but it was a trap to profit from the students' suffering.

However, if the defaulters are listed in CCRIS' record, the chances of them getting a loan, credit card, hire purchase or personal loan from banks and financial institutions would be slim.

Moreover, the banks also weigh up the their financial commitments via CCRIS before making a decision to approve or reject an application.

Adam said it would put student looking for loans to start a business in a spot if they were blacklisted in CCRIS.

In April last year, Adam along with 300 students held a demonstration at Dataran Merdeka, calling for the abolition of the PTPTN.

They marched, carrying pictures of Prime Minister Datuk Seri Najib Razak and the-then Higher Education Minister Datuk Seri Khaled Nordin with wreaths around it as a show of protest.

The group then set up tents at the historic Dataran Merdeka and stayed on until the Bersih 3.0 gathering on July 28.