Reporting unpaid student loans to credit bureau will actually make students “happy”, says Education Ministry

August 20 2013

By : Rita Jong

The move by the National Higher Education Fund Corporation (PTPTN) to link loan defaulters to Bank Negara's Credit Bureau database will not "victimise" students. Education Minister II Datuk Seri Idris Jusoh (pic) said the ministry will listen to views to ensure that students would not be put at a disadvantage. "We will ensure that nobody will be victimised or let down by the programme," he told The Malaysian Insider on the sidelines of the Students Consultation Meeting event at the Putra World Trade Centre (PWTC) in Kuala Lumpur.

"The intention is good and we will make sure everyone's view is heard." Yesterday, Idris announced PTPTN's move to link its list of defaulters to the Central Credit Reference Information System (CCRIS), a computerised database system under Bank Negara used by banks to assess prospective borrowers' financial profile. It had since triggered a wave of criticism from opposition politicians and non-governmental organisations. Idris today assured that the ministry will look into the implementation of the programme and will make sure that "everyone is happy".

"We will make sure that nobody would be at a loss.. PTPTN, students and the country would be happy," he added. Idris said the move was two-pronged, first to help control rising household debt and second to promote the culture of good repayment by PTPTN borrowers. 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.

The move by PTPTN has been slammed by PKR strategy director Rafizi Ramli calling it a form of threat and punishment to the students as they would have problems getting hire purchase loans. Malay rights group Perkasa's secretary-general Syed Hassan Syed Ali also labelled the move by PTPTN as a persecution of Bumiputera youths as most of these loan holders are Bumiputeras. PTPTN has approved education loans to 2.2 million students from July 1, 1997 until June 30, this year, amounting to a total of RM49.9 billion.