The state of Malaysian higher education today is mostly the result of privatisation. It started in 1996 when Najib Abdul Razak was the Education Minister, and the Education Act and Private Higher Education Institution Act were introduced.
A year later, the National Higher Educational Fund Corporation (PTPTN) was established. The purpose is to fund students to pursue their studies, which allowed the number of Private Higher Educational Institution (IPTS) to grow significantly.
In 2007, for the first time, the budget for PTPTN which was distributed to IPTS exceeded the amount given to the Public Higher Educational Institution (IPTA), and this trend continues on until today. In 2015, RM2.5 billion was distributed to IPTS compared to RM1.7 billion to IPTA.
Expert Market is a commercial website that collects university fees data from the Quacquarelli Symonds’ Top Universities list for 2014/2015 academic year, together with the 2013 Gallup Median Self-Reported Income report.
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Based on their report, the average university fee in Malaysia is USD18,000. The average amount of salary in Malaysia spent on university fees is 55%.
As a comparison, the percentages are 73% in Chile, 53% in America, 42% in United Kongdom, 36% in Singapore and 18% in Japan. The Malaysian Government responded that these figures do not reflect the true picture of IPTA fees in Malaysia. However, those figures could make sense for IPTS.
At the same time, the government has made a drastic cut to the IPTA budget. In 2016, IPTA budget was cut by RM1.4 billion, 27% less compared to the previous year. Allocation for scholarships, bursaries and education grants were cut by RM812 million (23%). Thus, poor students who rely on these aids became the main victims.
The following year, budgets for 20 IPTA were reduced from RM7.57 billion to RM6.12 billion (19.23%). Hence, it was no surprise at all that there was less intake offered by these IPTAs.
The Peoples’ Justice Party (KEADILAN) Advisory Panel for Higher Education – to which I am a member – receives many complaints from brilliant students who are not offered any place in IPTA, neither in nor out of their chosen field, due to this trend.
Therefore, students who seek to further their education in Malaysia are left with no other choice but to resort to the more expensive IPTS. IPTS also considers PTPTN as their source of easy money when in fact PTPTN is the one taking the risk of debts from graduates upon completion of studies.
At a time when many graduates are facing unemployment, low salaries and high cost of living, repayment rates to PTPTN will remain low.
In 2015, the unemployment rate was 3.8% for those with higher education compared to 1.8% for those with lower or non-formal education.
Between 2011 and 2015, PTPTN’s cumulative loss reached RM6.5 billion. In 2015, PTPTN’s bad debt was RM8.49 billion. Repayment rate was only 46.6%.
To overcome this problem, PTPTN had taken several measures. That included listing borrowers’ names in the Central Credit Reference Information System (CCRIS) which affect them when applying for housing or car loans, blacklisting their passports, ceasing full scholarships, and encouraging Employee Provident Fund (EPF) withdrawals to enable these graduates to make repayments.
Listing them in CCRIS and encouraging withdrawals of their precious retirement fund did not bring any positive impact. In fact, borrowers who are poor tend to remain stuck in the vicious cycle of poverty.
In my opinion, repayment should only be made when graduates have earned a comfortable income – as practiced in United Kingdom and Australia – perhaps at RM4,000 a month.
In the long run, obviously PTPTN will not survive. The solution is free education in all IPTA. Furthermore, this is not merely wishful-thinking but a reality in Finland, Sweden, Norway, Germany and Scotland. Chile introduced this policy for 50% of the poorest students this year due to high education fees (please refer above).
Senator Bernie Sanders who almost shocked Hillary Clinton by being nominated as President for the American Democratic Party, had also made the same proposal.
Besides that, poor students should be given allowances to cover their cost of living and accommodation. In 2013, it was estimated that free education in Malaysia would cost RM5 billion a year.
We should gradually cease JPA and MARA undergraduate scholarships for studies abroad. This policy made sense in the 1970s and 1980s when the country lacked in the number of universities but this reality has now changed.
In fact, many JPA scholars were allowed to migrate abroad without paying a single sen to the government! It would have been better if we could invest in our own IPTA.
We should also build more IPTAs to reduce the demand for IPTS. This would reduce the requirement for low-quality IPTS, allowing only the best to remain operational.
At the same time, we can also learn from Germany which is able of providing free higher education, by offering attractive and quality technical and vocational education as a foundation to prevent an influx of graduates in the market.