MCA Youth has criticised the Higher Education Ministry over the announcement that National Higher Education Fund Corporation (PTPTN) loan defaulters will be barred from leaving the country, saying the policy remains unclear and lacks firm enforcement.
Its secretary-general Saw Yee Fung warned that this measure is unlikely to effectively curb non-repayment and risks becoming a token gesture, and the policy may fail to recover outstanding loans, undermine the sustainability of the PTPTN system, and affect students who genuinely need assistance
Saw was responding to Deputy Higher Education Minister Adam Adli Abdul Halim’s announcement during question time in Parliament on Monday (Feb 9) that the travel restrictions only apply to defaulters who can repay their loans but choose not to do so or those working overseas.
“(Adam Adli’s) announcement also appears to contradict earlier general election promises by Pakatan Harapan to abolish PTPTN repayments, while in practice acknowledging the direction previously taken by Barisan Nasional on this issue,” she said.
“However, the absence of clear enforcement standards raises doubts about the government’s ability to effectively implement this travel restriction.
“Adam Adli has stated that the travel ban will target high income borrowers who can afford to repay but choose not to. Yet there is no clear definition of what constitutes high income, and the threshold remains vague.
“The public is unable to determine who will be affected or how the policy will be enforced. If even the basic criteria are unclear, questions will arise as to whether the ban is merely symbolic and whether selective enforcement may occur.”
Saw went on to note that such a restriction risks penalising graduates who already meet their repayment obligations, adding that it is difficult to reconcile the claim that individuals who can afford to travel abroad, including for work, are simultaneously unable to repay their PTPTN loans.
She said PTPTN already provides several support mechanisms, including a 12-month grace period after graduation, options to restructure repayments based on financial capacity, repayment extensions until the age of 60, deferments of up to two years for those without income, and deferments during further studies.
“With these mechanisms in place, those who still refuse to repay can reasonably be considered deliberate defaulters. If firm action is not taken even against this group, the travel ban will remain an empty policy without meaningful deterrent effect,” she noted.
“Fewer than 0.7% of borrowers are currently placed on the travel ban list, highlighting that enforcement of travel restrictions remains too low to deter deliberate defaulters.
“Therefore the actual risks of this new policy is allowing long term arrears to persist in not repaying their debt, undermining the sustainability of the education loan system to the detriment of future students.”
Saw said the government must address the PTPTN defaulter issue directly to safeguard the sustainability of the loan scheme.
In the same vein, she said PTPTN should work with the Inland Revenue Board and the Immigration Department to institutionalise and actively pursue repayments rather than relying on rhetoric alone.
“In this regard, MCA Youth proposes that the government adopt a monthly salary deduction model similar to the Monthly Tax Deduction system, allowing repayments to be automatically deducted from salaries,” she remarked.
“This would institutionalise repayment, reduce deliberate default and ensure instalments are based on graduates’ actual income so that obligations remain fair and enforceable.
“If the travel restriction remains a policy without tangible outcomes or consequences for defaulters, the issue will persist year after year without improvement.
“The government should also consider extending restrictions to loan assessments for housing and vehicle purchases to create a genuine deterrent and strengthen repayment discipline.” ‒ Focus Malaysia
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