Introduction

Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) is a statutory

body responsible for managing the financing of the education of students in
public higher education institutions and the private sectors in Malaysia. It
was was established under the National Higher Education Fund Act 1997
(Act 566) and is effective from 1st July 1997. PTPTN became operational on
1st November 1997 at Bangunan Wisma Chase Perdana, Off Jalan
Semantan, Damansara Heights, Kuala Lumpur to replace Jabatan
Perkhidmatan Awam (JPA), which previously provided assistance for
education loans for students.

PTPTN functions are to manage disbursement for the purpose of higher

education, and to collect loan settlement, collect deposits, design and offer
saving schemes for the purpose of saving for higher education and carry
out any other functions given to the PTPTN under any written legislation. It
was established to ensure efficient financing for students who are eligible
to pursue studies at institutions of higher learning (IPT) in line with
government aspirations that no student should be denied access to higher
education because of financial reasons. The loan scheme will enable
students to fully or partially pay their fees and their subsistence for the
duration of their study in the IPT. Thus, the scheme provides greater
opportunities to students to continue their tertiary education.

Following are the criteria for students who eligible to apply for education
loans:

• Malaysian citizens;
• Not exceeding 45 years of age on date of application;
• Passed Malaysia Certificate of Education (SPM) with credits in any 3
subjects;
• Passed SPM for Community College Certificate and Polytechnic
Diploma graduates with CGPA 3.0 and above;
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 • IPTA/IPTS/Polytechnic students must register to pursue courses
approved by the IPT Management Department (IPTA/IPTS)/Polytechnic
Management Department and Community College of the Ministry of Higher
Education;
• IPTS students must obtain the Accreditation Certificate from the
Malaysian Qualifications Agency (MQA). The course and Accreditation
Certificate approval period must still be valid on the date of application;
• All students must possess entry requirements determined by the
Ministry of Higher Education to pursue the course. For students with
qualifications that differ from that stipulated, verification that the said
qualification is equivalent to the required qualification must be obtained
from departments or agencies specified as above;
• The remaining period of study upon application must exceed one
year;
• PTPTN loans require two (2) guarantors that must consist of biological
father and mother of student regardless of the parents age and income;
• From 18th May 2009 onwards, SSPN saving terms for PTPTN loans
application will be discontinued;
• Have no other sponsor; and
• Loan overall total must not exceed RM65,000.00

Students who are qualified to be given the loans are depending on the
level of financial ability of their family and they must follow full time
program of first level degree or diploma (pre-degree) in any institution of
higher education. Once the eligible students received the loads, the
payment of loans will be suspended if the students obtain a GPA of less
than 2.0 or the students defer studies based on the contract that has been
agreed by each other.

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 The borrower is encouraged to pay back the loan without waiting for the
letter of claim. The period of loan repayment is based on the total loan
taken as follows:

i. RM10,000 and below - 60 months

ii. RM10,001 to RM22,000 - 120 months
iii. RM22,001 to RM50,000 - 180 months
iv. RM50,001 and above - 240 months

Administrative costs of 4% annually will be charged on the date of loan

repayment up to 31st December 2003. From 1st January 2004, the
administrative cost is reduced to 3% annually on the remaining monthly
loan. Administrative costs will be calculated 6 months after completion of
study or termination of loan as specified in the signed agreement. No
reduction is given in administrative cost. Deferment of repayment can be
considered for borrowers who continue their studies or who are not yet
working by submitting an application. However, administrative cost will be
charged during the period of deferment. Administrative costs will be waived
for full repayment of loan within 6 months. The exemption of repayment
will only be considered for borrowers who obtain first class honors for loans
approved prior to 1st July 2005 ONLY by submitting an application.

Listed below is the formula for Loan Repayment Schedule with 3%

administrative costs:

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 Students in public higher education institutions (IPTA), which took a
contract worth RM19000 from PTPTN loans, need to pay back a total of RM
23,083.89 after adding excess of 3% for payment within 10 years. While
the students of private higher education institutions (IPTS) to take a loan of
RM 60,000 for three years subject to repayment of RM 87, 261.17.

Education loan repayment can be made in monthly installments for a

period of 10 to 20 years. It should start six months after graduation or
when getting a job, whichever is earlier. Reimbursement shall be made by
the Inland Revenue Board appointed by the government as a collection

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agent for the PTPTN. Repayment can be made through other means as long
as it is approved by PTPTN. PTPTN accept payments made in one lump sum
or in any amount as long as it is less than the amount agreed upon by the
agreement. Contains the amount of loan repayment of principal and
administrative costs are charged at 3% per annum on the balance each
month.

So far PTPTN has spent a total of RM 37 billion in 13 years ago. PTPTN has
a service charge of 4% and was trying to make amendments to the act
PTPTN which aims to tighten control of loan repayment. This action will
definitely give more pressure on borrowers. The total borrowing is about
1.7 million people. There are 191.262 people of borrowers unable to make
loan payments. They are stressed because they cannot afford to pay. The
main factor is because they do not have a permanent job and the cost of
living increases each year, especially in the city.

With the existence of this personal finance project, perhaps it will guide
the PTPTN borrowers on how to manage their future personal financial
management once they are entering to their job industry. This project will
explain and suggest on planning of how many years estimation to pay back
the loan and how much to pay in certain period according to certain
circumstances. The next chapter of this project report will describe the
issues related to PTPTN borrowers in order for the PTPTN borrowers to take
the issues seriously to avoid bad consequences in future. Then, this project
report will suggest the PTPTN borrowers in managing their personal finance
in order to pay back the loan in effective way.

ISSUE RELATED TO PTPTN LOANS

ARTICLE 1: GIVE BACK THE MONEY!: RM12 billion unpaid study

loans

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KUALA LUMPUR: Student loan defaulters owe the National Higher
Education Fund Corporation (PTPTN), Public Service Department and Mara
more than RM12 billion. Since PTPTN was established in 1997, it has given
out loans totalling more than RM11.5 billion. To date, it has only recovered
about RM350 million. Defaulters owe the PSD RM1.6 billion for loans
disbursed between 1987 and 2004, and Mara RM198 million.
A spokesman for PTPTN said the corporation had issued more than 60,000
reminders and 2,500 notices of claim.
He said from January next year, PTPTN would require parents to have
savings in the National Education Savings Scheme before their children were
eligible for loans. Under the new conditions, parents earning more than
RM2,000 a month must have RM3,000 in the savings scheme while those
earning less than RM2,000 must have RM500.
"We have also made it compulsory for parents or guardians to stand as
guarantors," the spokesman said."Hopefully these new conditions will help us
overcome the problem of unpaid loans.
"Apart from the "Big Three", many students have also borrowed from other
sources and failed to repay.The Education Ministry and MIC’s Maju Institute
of Educational Development (MiED) are owed RM50 million each, the Penang
government RM24.2 million, the Pahang government RM22 million and the
Selangor government RM12 million. Perlis is probably owed the lowest
amount — RM41,035 due from 22 students. Negeri Sembilan and Kelantan
are not making public their outstanding student loans, saying it would cause
"unnecessary alarm". Other states said they did not have the exact figures.
PSD, which has recovered RM385 million, is trying to get back RM1.6
billion."We give borrowers between five and 30 years to repay the loans
while those who excel in their studies are given a 75 per cent rebate," said
PSD corporate communications head Hasniah Rashid.
"Some of our defaulters include private students who were given interest-
free loans of up to RM200,000 under a cost-sharing concept to study

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abroad."Under this scheme, those who pursue critical courses such as
dentistry, medicine and pharmacy do not have to repay their loans if they
agree to be bonded to the government for 10 years.
PSD had issued warning letters to 13,800 defaulters early last year."As a
result, half of them began servicing their loans while another 10 per cent
settled the full amount."Of the remaining, some have agreed to pay us
monthly.
"The rest have been blacklisted or have had court action instituted against
them."Last year, the department submitted the names of 8,288 loan
defaulters to the Attorney-General’s Chambers for legal action.
The department also revoked the 75 per cent discount for hardcore
defaulters. Their spouses and children have been denied loans. Hasniah said
the department was unable to trace those who had "absconded" while
pursuing further studies abroad.
"There were a few cases in the past but we have no records of the figure
before 2004."To keep track of its scholars, the PSD has stationed officers in
Britain, the United States, Japan, France, Germany and Australia, where the
majority of its students are located.
A Mara spokesman said: "We have about 150,000 defaulters and this has
become a chronic problem."We even published their names in newspapers
and their children have been denied admission to Mara institutions of higher
learning.
"The sad part is that many of these defaulters are financially sound and
there is no reason why they cannot repay their loans."
The spokesman said these people were irresponsible and selfish."We have
appealed to them to pay as little as RM100 per month. This will at least keep
the fund going."By not paying, they are robbing others of the opportunity to
study."
MIC president and MiED chairman Datuk Seri S. Samy Vellu said: "Those
who are not paying are preventing thousands of Indian students who want to
study from doing so."

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 He said if the more than 3,000 defaulters were to repay their loans, another
11,000 students would benefit."What upsets me is that some of these
defaulters have since become successful lawyers and doctors, earning up to
RM10,000 a month.
"Words cannot describe their selfish attitude," he said. "When they come to
us for loans, they come with such a sad face and beg us to help them. Now,
they don’t even bother about others."
The Mara spokesman said many of these defaulters had taken loans to
study abroad."After finishing their studies, they do not return. Not only have
we lost the money, but also the expertise they would have brought back to
the country."
According to figures from the Higher Education Ministry, the number of
Malaysian scholars who remain abroad has dropped from 117,297 in 2000 to
56,609 in 2005.This was attributed to the efforts of the government to woo
these students back by offering them incentives."It does not make sense,"
said the spokesman. "First these students took money from us to study, then
they did not repay their loans, and now the government has to ‘beg’ and
offer them incentives to come back."

©New Sunday Times by P. Selvarani and Patrick Sennyah, Sunday,

08 April 2007.

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 Reference:
http://www.malaysianbar.org.my/legal/general_news/give_back_the_money_r
m12_billion_unpaid_study_loans.html

Summary of ARTICLE 1:

 This article is basically about the statistics of defaulters for the three
bodies which is; PTPTN, PSD and also MARA.

 The article showed that Malaysian students owed PTPTN about 11.1
billion MYR.

 PTPTN already giveaway RM11.5 billion amounted loans in 2007 for the
students but they only managed to collect about RM350 million.

 They have issued 60,000 reminders and 2,500 notices of claim.

 This showed how critical this issue is towards PTPTN itself. The number
itself showed a very little percentage of loaners paid back PTPTN loan.

 They also came up with a solution to avoid such issue in the future by
firming the guarantor’s status for the loan.

 PTPTN would require parents to have savings in the National Education

Savings Scheme before their children were eligible for loans:
o Parents earning more than RM2,000 a month must have
RM3,000 in the savings scheme
o Earning less than RM2,000 must have RM500.

 They have made it compulsory for the parents itself to be the

guarantors.

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 ARTICLE 2: Blacklist the PTPTN loan defaulters

The issue on the National Higher Education Fund Corporation (PTPTN) loan
defaulters has been going on for a long time. It is not a new issue, but a stale
one which should have been resolved a long time ago. Since the corporation
was set up 13 years ago to provide loan facility for students pursuing higher
studies, the issue on loan defaulters has never ceased to be highlighted and
often, whoever chaired the corporation would go “amok” for failing to detect
and collect the repayment from the tens of thousands of borrowers.
Yesterday, PTPTN went into a rage again. Its chairman, Datuk Ismail
Mohamed Said, stressed that the corporation would not be lenient anymore
with the loan defaulters. Hence, effective June next year, all PTPTN borrowers
would be required to make repayment through salary deduction.
Perhaps that would involve a lot of work, but the job should have been
done a long time ago to recover the arrears in unpaid loans from the more
than 46,000 borrowers who have never pay back their loans since their
completed their studies and started work.
Are they dead or alive, but simply ignored the need for them to make the
loan repayments. Indeed, efforts to trace them may be difficult, but when
there’s will, there a way. Hence, the need for the PTPTN management to be
more firm and not merely issue statements to scare them only.
If all this while, everything they have done failed, it is hoped that the new
approach will overcome problems to recover the loans. Imagine, out of the
RM23 billion from the loan fund which has been given out as loans, only
RM1.8 billion has been recovered. It shows how serious the problem is.
The action of the default borrowers has deprived other students the
opportunity to enjoy similar benefit as could be seen from complaints by new
students over the delay in the PTPTN loan being deposited into their bank
accounts. Currently, the students are not ashamed to ask, but after
graduating and securing jobs, they forget their responsibility to repay the

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loan. For the Muslims, they forget that it is compulsory for them to pay their
debts.
Do not be selfish because there are reports which found that the defaulters
are not those without money, but their income is spent to pay their car and
housing loans, credit cards and others. These are their priority that the
PTPTN loan repayment of at least RM150 a month is not included in their
monthly budget.

It is kind of weird because they are able to pay the car loan, which may be
RM500 a month or the credit card payment of RM350 a month, on schedule.
Perhaps, this is due to the rigidness of the financial institutions in tracing the
borrowers night and day, including calling them every day, that made them
pay. Apart from that, it is also their fear of being blacklisted.
So, it is time for PTPTN to blacklist the loan defaulters, besides deduction
their monthly salary for the loan repayment. The move is seen more
effective because if their names are blacklisted, they would have to pay back
their loans. Otherwise, their names will be in the blacklist forever.
Effective today too, PTPTN should forget about their lenient strategy by
sending warning notices to the loan defaulters. Now it is time for it to be
more firm. That is the only way to recover the loans

Utusan Online, 21/09/2010.

Reference:

http://ww2.utusan.com.my/utusan/special.asp?
pr=theMessenger&y=2010&dt=0921&pub=theMessenger&sec=Editorial
&pg=ed_01.htm

Summary of ARTICLE 2:

 This article is mainly about the steps that PTPTN have taken to ensure
defaulters to pay their loans.

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  Starting in June 2011 they are deducting borrower’s salary for PTPTN
payment.

 It is stated that more than 460,000 borrowers have never pay back
their loans.

 From RM23 billion from the loan fund which has been given out as
loans, only RM1.8 billion has been recovered.

 The actions of the loans defaulters affecting those other new students
who are loaners of PTPTN. This could be seen from complaints by them about
the delay of PTPTN loan being deposited to their bank accounts.

 The loan defaulters are being selfish because they are able to pay
other loans such as for car and house but then they are not including PTPTN
payment at the end of the months.

 Compared to up to RM500 other loan payments, they are neglecting

PTPTN payment, which is the least they could pay is RM150. They are not
allocating their money wisely and being negligence.

 This is also due to the banks that giving away loans are more rigid and
firm in chasing their borrowers to pay back their loans.

 They also fear that those banks will blacklisted their name, and this will
make it hard for them to borrow again in the future.

 PTPTN should do the same for the sake of future students who want to
borrow from PTPTN and further their study.

 Thus, they need to be more firm in making borrowers to pay back their
loans instead of giving away reminders and statements.

 They decided to blacklist defaulters until they pay back their loans or
else they will be blacklisted forever.

ARTICLE 3: PTPTN loans – no more excuses for non-payment

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 In keeping with the Government’s aim of modernising processes and
services, PTPTN has implemented measures to ensure that it can serve the
public’s needs of receiving loan facilities and for repayment. With a large
arsenal of payment methods at their disposal, borrowers from the National
Higher Education Fund Corporation (PTPTN) no longer have any excuse to
miss their loan repayments after completing their studies. PTPTN in keeping
with the Government’s aim of modernising its processes and services, has
implemented various measures to ensure that it can serve the public’s needs
of receiving loan facilities to pay for their tertiary studies. A flip side of
PTPTN’s duties is to reduce the number of defaulters that spring up year
upon year. To date, 28,627 defaulters have been blacklisted for owing PTPTN
a whopping RM454.5mil.
At the same time, up until October this year, 1,446,939 students have been
given PTPTN loans with a total amount of RM31bil.The statutory body’s chief
executive officer Yunos Abd Ghani said various measures were in place to
ensure that loan repayments were as easy as possible for the students.
These measures were also used in all stages from the time when a
prospective student applies for the loan to the time they graduate and need
to start paying their instalments, said Yunos in an interview.“There are three
different modules in PTPTN’s core business – application for loan, loan
disbursement and loan recovery,” he said. He said since the intake of 2007,
PTPTN has implemented the system of using online forms for application of
loan facilities from PTPTN.
“You only have to buy a PIN (personalised identification number) from Bank
Simpanan Nasional (BSN). “The PIN only costs RM5 per transaction and is
valid for six months. You can apply for the PIN at any time of the year, for 24
hours a day,” he said. Yunos added that the limited validity time of the PIN
was put in place for security purposes in order to prevent the applicants’
identities from being hijacked. Upon submitting their forms, the applicant’s
data will be synchronised with the National Registration Department’s
database to determine and verify their nationalities. PTPTN loan facilities are

Page 13
only available to Malaysians up to the age of 45 who are pursuing tertiary
education particularly diploma, degree and post-graduate studies.
“Our objective of having a computerised application, vetting and approval
system is to be able to say whether the student’s application has been
approved or not in 72 hours or three days.“The students will then be
informed of whether their applications have been approved or rejected by
broadcasting this information through SMS,” he said. At this point, the
student will only have to sign in again to PTPTN’s website to obtain their
approved Letter of Offer.
“They will then take this Letter of Offer, collecting all accompanying
documents and submit their completed forms and relevant documents to the
universities of their choice,” he said. He added that every Letter of Offer is
individually bar-coded to each applicant to prevent duplication or fraud. The
use of technology in PTPTN’s processes continues throughout the time that
the students are pursuing their studies, with the statutory body working
closely with the BSN and the universities involved.
“The universities will update the students’ status and their results for each
semester. “PTPTN will only disburse the loans for students who scored above
GPA 2.0,” Yunos said. He explained that this was to ensure that only
graduates of employable quality get to enjoy the loan facility. “If the
students do not meet a certain standard, for instance, the minimum GPA 2.0,
it would have an effect on their future employment prospects after they
graduate.
“Our intention to ensure that they graduate and become employable in the
job market,” he said. He also assured that despite scoring below the
minimum GPA 2.0 for one semester, PTPTN would continue disbursing the
loan if the student displayed improvement in the next semester.Graduates
are given a six-month grace period after completing their courses before
they have to start honouring their installments. He pointed out that as a form
of social obligation by the Government, PTPTN encouraged borrowers to
settle their loans as early as possible. He said this was because unlike

Page 14
commercial banks which profited more if the loan tenure was longer, the
element of government subsidy was extended the longer the borrower took
to pay off their loans.“Generally, the first reminder sent to them when they
graduate informing them that they can make a full settlement within a six
month period without service charge.
“At the end of the 6 months, we send another notice informing them that
their installment should start on a certain date and the amount involved,”
Yunos said. The chief of PTPTN’s payment are online payment among others,
over and above the traditional but slow over-the-counter type of payment
method.
“Online banking has remained the most popular method for borrowers to
repay their PTPTN loans. Account holders can go online to their respective
banks’ websites to remit their payments through MayBank, CIMB, Bank
Islam, RHB and Public Bank,” Yunos said. Besides the ubiquitous online
banking methods, PTPTN also allows over-the-counter payment at KL Sentral
and salary deduction via the Inland Revenue Board. To meet the needs of a
generation of IT-savvy tertiary students, PTPTN also gives the flexibility to
check their account balances through by sending and receiving My SMS
15888.It gives the borrower an accurate and fast way to check the balance
anywhere using the mobile phone.“The network is very extensive. But
because of some people’s attitudes, we still have defaulters. Then we have
to follow the normal legal procedures,” Yunos said in an interview. For
defaulters, they would receive three notices if they do not pay their PTPTN
loans for three consecutive months.
“If there is no action taken after the 3rd reminder, we will send a legal
notice of demand.“The notice will be sent by our panel of lawyers. When we
file the summons, we are basically withdrawing all existing contract, which
means that the entire loan amount is due.
“It means they have breached the original contract. Simultaneously, we will
put their names into the Immigration Department’s blacklist database to
forbid them from travelling.

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 “If you can travel, what does it mean? It means you have money,” he said.

The STAR Online , By LESTER KONG , December 3, 2009.

Reference: http://thestar.com.my/news/story.asp?
file=/2009/12/3/nation/5166188&sec=nation

Summary of ARTICLE 3

 This article is all about how the PTPTN is providing means for the
borrowers in easing their process of doing payment to them.

 A flip side of PTPTN’s duties is to reduce the number of defaulters that

spring up year upon year. To date, 28,627 defaulters have been blacklisted
for owing PTPTN a whopping RM454.5mil.

 There are three different modules in PTPTN’s core business :

o Application for loan
o Loan disbursement
o Loan recovery
 Here, we are going to focus on the loan recovery module:

o Online banking has remained the most popular method for

borrowers to repay their PTPTN loans. Account holders can go
online to their respective banks’ websites to remit their
payments through MayBank, CIMB, Bank Islam, RHB and Public
Bank.

o PTPTN also allows over-the-counter payment at KL Sentral

and salary deduction via the Inland Revenue Board.

o PTPTN also gives the flexibility to check their account

balances through by sending and receiving My SMS 15888.

 Generally, the first reminder sent to them when they graduate

informing them that they can make a full settlement within a six month
period without service charge. At the end of the 6 months, another notice

Page 16
informing them that their instalment should start on a certain date and the
amount involved.

 For defaulters, they would receive three notices if they do not pay their
PTPTN loans for three consecutive months.

 If there is no action taken after the 3rd reminder, we will send a legal
notice of demand. The notice will be sent by PTPTN’s panel of lawyers.

 When they file the summons, they are basically withdrawing all
existing contract, which means that the entire loan amount is due. It means
they have breached the original contract.

 Simultaneously, their names will be in the Immigration Department’s

blacklist database to forbid them from travelling.

Page 17
 PTPTN Repayment

There are two types of PTPTN repayment method, either paying progressively or
paying averagely. The borrower can choose either one that suit with their budget
because each method is calculated differently. The two types of PTPTN repayment
method can be defined as below:

1) Paying progressively

Method of repayment installments is according to the determination that has been

designed. For example, the repayment installments will be charged 5 times the
increase and 30% increase in the installment loan payments. Means that if the
payment period is 10 years, then for the first 5 years, the monthly installment
amount will change with an increase of 30% per year but in the sixth and
subsequent installments throughout the remaining months will be fixed terms of
repayment .

2) Paying averagely

Installment method of repayment is according to calculations based on the average

amount of the loan and administrative costs incurred and the repayment period.
The installment amount is fixed throughout the repayment period.

In this report, we study four cases regarding of PTPTN repayment that involve these
two types of PTPTN repayment method. The purpose is to help the fresh graduate
especially form private university and degree holders to choose the better plan for
payback their PTPTN study loan according to their budget. We made comparison of
these two method by stated their differentiations and recommend suitable method
for the PTPTN borrower to settle their loan. The cases will use loan RM30,000 as
standard loan that student will borrow. The cases will analyze which one is better to
choose either progressively payment or averagely payment method and is better to
payback in short term or long term.

Page 18
 Loan Lump Sum
Year Monthly Installment Balance Payment Rebate
5,879.3
0 30,000.00 30,000.00 4
4,984.8
1 108.30 x 12 = 1299.6 29,594.86 29,703.16 8
4,108.1
2 140.79 x 12 = 1689.48 28,782.11 28,922.90 4
3,263.1
3 183.03 x 12 = 2196.36 27,430.73 27,613.76 5
2,468.4
4 237.94 x 12 = 2855.28 25,370.20 25,608.14 1
1,748.2
5 309.32 x 12 = 3711.84 22,378.55 22,687.87 1
1,134.4
6 402.12 x 12 = 4825.44 18,166.87 18,568.99 6
7 402.12 x 12 = 4825.44 13,827.08 14,229.20 648.79
8 402.12 x 12 = 4825.44 9,355.30 9,757.42 295.14
9 402.12 x 12 = 4825.44 4,747.51 5,149.63 77.54
(402.12 x 11) + 401.68 =
10 4825.00 0.00 401.68 0.00

Case 1: Progressive rate 10 Years For Loan RM 30, 000

Case 2: Average rate 10 Years for Loan RM 30,000

Loan Lump Sum
Year Monthly Installment Balance Payment Rebate
4,761.8
0 30,000.00 30,000.00 8
3,897.6
1 289.68 x 12 = 3476.16 27,388.12 27,677.80 0
3,112.7
2 289.68 x 12 = 3476.16 24,696.80 24,986.48 6
2,409.8
3 289.68 x 12 = 3476.16 21,923.62 22,213.30 0

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 1,791.1
4 289.68 x 12 = 3476.16 19,066.09 19,355.77 8
1,259.4
5 289.68 x 12 = 3476.16 16,121.64 16,411.32 5
6 289.68 x 12 = 3476.16 13,087.64 13,377.32 817.29
7 289.68 x 12 = 3476.16 9,961.36 10,251.04 467.42
8 289.68 x 12 = 3476.16 6,739.98 7,029.66 212.63
9 289.68 x 12 = 3476.16 3,420.63 3,710.31 55.83
(289.68 x 11) + 289.99 =
10 3476.47 0.00 289.99 0.00
Description of Case 1 and Case 2
Case 1 and case 2 is the example of student with loan RM 30, 000 with the
10 years period of payback the loan (120 month). Although the amount of
loan and the period of paying back the loan are the same, but the total loan
to be paid are different for the two cases.

Case 1

Progressive Rate

Total Loan = RM 30, 000

Rebate = RM 5,879.34

Total Loan + Interest Charge (3%) = RM 35, 879.34

Case 2

Average Rate

Total Loan = RM 30, 000

Rebate = RM 4,761.88

Total Loan + Interest Charge (3%) = RM 34, 761.88

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 Data above shows that if borrower choose Progressive rate the total amount
of payment are higher compared to Average rate. However, if the borrower
chooses to Average rate, the interest rate charged is less compared with
Progressive rate.

Case 3: Progressive rate 15 Years for Loan RM 30, 000

Loan Lump Sum
Year Monthly Installment Balance Payment Rebate
8,643.6
0 30,000.00 30,000.00 6
7,742.7
1 69.74 x 12 = 836.88 30,064.00 30,133.74 8
6,843.4
2 90.66 x 12 = 1087.92 29,875.42 29,966.08 3
5,954.3
3 117.86 x 12 = 1414.32 29,350.18 29,468.04 3
5,087.1
4 153.22 x 12 = 1838.64 28,378.76 28,531.98 0
4,257.0
5 199.19 x 12 = 2390.28 26,818.50 27,017.69 7
3,484.4
6 258.95 x 12 = 3107.40 24,483.73 24,742.68 5
2,782.8
7 258.95 x 12 = 3107.40 22,077.94 22,336.89 5
2,154.4
8 258.95 x 12 = 3107.40 19,598.97 19,587.92 3
1,601.3
9 258.95 x 12 = 3107.40 17,044.61 17,303.56 8
1,126.0
10 258.95 x 12 = 3107.40 14,412.55 14,671.50 4
11 258.95 x 12 = 3107.40 11,700.44 11,959.39 730.75
12 258.95 x 12 = 3107.40 8,905.84 9,164.79 417.96
13 258.95 x 12 = 3107.40 6,026.23 6,285.18 190.17
14 258.95 x 12 = 3107.40 3,059.04 3,317.99 49.97

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 (258.95 x 11) + 260.55 =
15 3109.00 0.00 260.55 0.00

Case 4: Average rate 15 Years for Loan RM 30, 000

Loan Lump Sum
Year Monthly Installment Balance Payment Rebate
7,291.6
0 30,000.00 30,000.00 1
6,413.5
1 207.17 x 12 = 2486.04 28,391.97 28,599.14 9
5,584.4
2 207.17 x 12 = 2486.04 26,735.03 26,942.20 9
4,805.7
3 207.17 x 12 = 2486.04 25,027.69 25,234.86 8
4,079.0
4 207.17 x 12 = 2486.04 23,268.42 23,475.59 1
3,405.7
5 207.17 x 12 = 2486.04 21,455.64 21,662.81 6
2,787.6
6 207.17 x 12 = 2486.04 19,587.73 19,794.90 4
2,226.3
7 207.17 x 12 = 2486.04 17,663.00 17,870.17 4
1,723.5
8 207.17 x 12 = 2486.04 15,679.73 15,886.90 7
1,281.1
9 207.17 x 12 = 2486.04 13,636.13 13,843.30 3
10 207.17 x 12 = 2486.04 11,530.38 11,737.55 900.84
11 207.17 x 12 = 2486.04 9,360.57 9,567.74 584.59
12 207.17 x 12 = 2486.04 7,124.78 7,331.95 334.35
13 207.17 x 12 = 2486.04 4,820.97 5,028.14 152.13
14 207.17 x 12 = 2486.04 2,447.10 2,654.27 39.96
(207.17 x 11) + 209.19 =
15 2487.06 0.00 208.19 0.00
Description of Case 3 and Case 4
Case 3 and case 4 is the example of student with loan RM 30, 000 with the
15 years period of payback the loan (180 month). Although the amount of
loan is a bit same, but the total loan to be paid are different for those four
cases. Case 3 and 4 are differ with case 1 and case 2 in the context of period
of paying back the loan.

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 Case 3

Progressive Rate

Total Loan = RM 30, 000

Rebate = RM 8,643.66

Total Loan + Interest Charge (3%) = RM 38,643.66

Case 4

Average Rate

Total Loan = RM 30, 000

Rebate = RM 7,291.61

Total Loan + Interest Charge (3%) = RM 37,291.61

Both cases 1 and 3 are Progressive rate; however the total loan plus interest
for case 3 are much higher than case 1. Same with case 2 and 4, they are
both average rate. However, the case 4 total loan are higher than case 2.
Case 3 and case 4 are both have longer period of payment, thus the interest
rate are much higher.

Progressive Rate vs. Average Rate

Progressive Rate Average Rate

• Small amount of installment monthly for the • Same amount of monthly
beginning year of payment installment until the end of
payment period.

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• High amount of installment monthly until the
last year of payment after the five first
years.
• Increasing 30% yearly of interest charging
for the first five year.
• The total amount of loan are more compared
to average rate, so more amount of money
need to be paid.
• Although high amount of installment
monthly as the year increasing, the value of
that amount at that time might be same as
current amount, if considering the inflation
factor, the devaluation value of the money.
• Amount of payment for the loan increase as
the salary increase. (After a few years of
working).
• Able to use the beginning years of work
salary for investment purpose.
• The early amount of installment monthly are
reasonable (if not working as an executive)
• The longer the period of paying back the
loan, the higher the interest rate, thus the
more need to be paid.
References
1. www.ptptn.gov.my/
• Fix amount to be deducted from the
salary until no more balance of
loan.
• Able to plan long term of financial
plan effectively.
• The fix amounts of monthly
installment are quite high for the
fresh graduate to pay considering
their income per month.
• Total amount of loan are less
compared to progressive rate.
• The longer the period of paying
back the loan, the higher the
interest rate, thus the more need to
be paid.
• Towards the end of the payment
period, the monthly installments
are less compared to progressive
rate.
• Reasonable amount of monthly
installment for fresh graduate with
executive job position salary.
• Consistent amount of payment to
be considered every month until
the last year of the payment period.
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2. http://www.malaysianbar.org.my/legal/general_news/give_back_the_m
oney_rm12_billion_unpaid_study_loans.html

3. http://ww2.utusan.com.my/utusan/special.asp?
pr=theMessenger&y=2010&dt=0921&pub=theMessenger&sec=E
ditorial&pg=ed_01.htm
4. http://thestar.com.my/news/story.asp?
file=/2009/12/3/nation/5166188&sec=nation

5. http://www.ptptn.gov.my/web/english/loans/loan-calc

6. http://financialrich.com/2009/08/07/ptptn-repayment/

7. http://www.blogedi.com/archives/369

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