PTPTN Defaulters Listed under CCRIS

Since its inception in Year 1997, National Higher Education Fund Corporation (PTPTN) has approved loans for 2.17 million students, of which 17387 had been exempted from repaying their loans for having graduated with first class honours. However, it was reported in July that 418094 people had yet to repay their PTPTN loans worth RM 2.8bil.

PTPTN has taken actions on the defaulters by publishing the names of defaulters in the newspapers and barring them from leaving the country because they ignored repeated reminders to repay their loans for more than five years. On 20th August 2013, Second Education Minister Datuk Seri Idris Jusoh said that PTPTN would work together with Bank Negara Malaysia (BNM) to include the names of defaulters on the CCRIS.

After 2 days, on 22nd August 2013, the government announced that the proposal has been put on hold due to an almost unified opposition response from the people. PTPTN will adopt a ‘wait and see’ approach to study the real problem behind the long list of defaulters and everyone is welcomed to give their feedback to PTPTN on ways to help defaulters repay their loans.

The impact of listing the names of defaulters on CCRIS is that it will be very difficult for them to apply for credit cards, personal loans, car loans and housing loans. This is because their installment on CCRIS is in arrears (debt overdue). If they can't borrow from financial institutions, they might end up borrowing from loan sharks. This will create even more social problems.

To ensure the sustainability of PTPTN and also no one will be jeopardised in any measures going to be implemented, the government should carefully study the reasons behind the failure of borrowers to repay their loans first then only take the necessary action.

SSPN (Budget 2013)

Five months ago, I posted Skim Simpanan Pendidikan Nasional (SSPN-i) and shared about how you could get yearly RM3000 tax relief from your income tax. Under Budget 2013, the tax relief for SSPN-i is revised to RM6000 yearly. This new tax relief will be enforced starting Tax Assessment Year 2012.

Who is eligible for the RM6000 tax relief?

1. Parents or guardians whose children are under 29 years old.
2. Depositors who open personal accounts are NOT entitled for this.

How is the tax relief counted?

1. It is counted by net saving on that particular year. If you deposit RM6000 and draw RM1000 in the same year, the amount entitled for tax relief will be RM5000 only.
2. If you deposit RM6000 on 31st December 2012, the tax relief is still eligible for Tax Assessment Year 2012.

What is the divident for SSPN-i? The divident for current year will be announced in the following year. Below is the table for the historical divident of SSPN-i.

Year	Divident (%)
2004	3
2005	4
2006	4
2007	4
2008	4
2009	2.5
2010	3.25
2011	3.7
2012	4.25

Currently, there is an ongoing promotion for SSPN-i from Bank Islam and PTPTN, started from 23 September to 23 December 2012. New or existing SSPN-i depositors could win up to RM100000 by depositing/open new account with RM100 through Bank Islam. The deposited amount must be maintained in 30 days until the end of the promotion to be eligible for the contest.

Go open a SSPN-i for your children or deposit through Bank Islam today to enjoy the tax relief and stand a chance to win RM100000!

PTPTN (Budget 2013)

Budget 2013 has given big discounts to those who took PTPTN education loan and also revised the tax relief for SSPN account depositors.

For PTPTN loan education, there are two types of discounts:

1. 20% discount for one time settlement of PTPTN education loan from 1st October 2012 to 30th September 2013 only.
2. 10% discount for 12-month continuous repayment according to payment schedule or 1 time advance payment of equivalent amount, starting from 1st October 2012.

Let's see how much a person can save if he previously took a full loan (RM80000). The loan interest is 3% pa, that person graduated for 3 years and did not pay a single cent, so the total loan amount with interest is RM87200. After the person heard about Budget 2013, he decided to settle the loan with assistance from his family and relatives, so he got a discount of 20%, which is RM17440. So he actually needed to pay back only RM69760 for the education loan of RM80000.

If that person unable to settle the loan, he can still choose to pay according to the payment schedule. Let's say the monthly payment is RM500, so 1 year the repayment amount is RM6000. 10% discount which is RM600 will be given on the total repayment and adjusted in the loan account. In this case, the effective interest rate is dropped from 3% to 2%.

I'll share about the SSPN tax relief in my next post. Stay tune!