KUALA LUMPUR (Feb 24): Borrowers owe the National Higher Education Fund Corp (PTPTN) nearly RM11 billion in arrears by the end of 2023, the most in the past 10 years, according to the Auditor General's Report.

Borrowers repaid only RM3.553 billion in 2023, a little under one-third of the RM10.853 billion arrears to the country’s main tertiary education loan provider, according to the report released on Monday. Some of the unpaid balance exceeded 12 years, the report showed.

The Auditor General’s Report recommended a review of PTPTN’s loan repayment collection mechanism to achieve a higher loan repayment rate, and to ensure that the agency does not rely on loans from local financial institutions to carry out its functions.

The report also recommended a review of repayment discount and exemption incentives provided to borrowers who graduate with a first-class bachelor’s degree. The Auditor General's Report also urged for the implementation of enforcement actions approved by the Cabinet in July 2024.

The amount of arrears has jumped since 2018 as enforcement ceased. The repayment rate was highest in 2017 at 79.3%, with borrowers paying RM5.19 billion of RM6.55 billion, due to stringent measures, such as blacklisting in the Central Credit Reference Information System (CCRIS).

Enforcement mechanisms, as stipulated under Section 23 of the National Higher Education Fund Board Act, comprise issuing overdue notification letters, reminder letters, enforcement action reminder notices, notices of demand, court summonses, judgements and travel restrictions.

A proposal to reinstate enforcement measures was approved by the Cabinet in July 2024.

Overall, PTPTN’s outstanding education loan stood at RM43.68 billion as at end of 2023, while the fund’s borrowings with financial institutions totalled RM41.13 billion.

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