The state of Malaysia’s higher education today is largely due to the privatisation of the sector. This started in 1996 when Najib Abdul Razak was the Education Minister and the Education Act and Private Higher Education Institution Act were the introduced.

In 1997, PTPTN was established. It was formed to provide students with funds to pursue higher education. This allowed the rapid growth of private institutions of higher learning. In 2007, the amount of PTPTN funds disbursed to private institutions surpassed public institutions for the first time and this has continued until today. In 2015, RM2.5 billion were disbursed to private institutions compared to RM1.7 billion for public institutions.

Expert Market, a website compared tuition fee data from Quacquarelli Symonds’ Top Universities ranking for the academic year 2014/2015 and the Gallup Median Self-Reported Income report data in 2013. The average tuition fee cost in Malaysia according to their report was US$18,000. The percentage of salary spent on tuition fees in Malaysia was 55 percent. By comparison the percentage was 73 percent for Chile, 53 percent for the US, 42 percent for the UK, 36 percent for Singapore and 18 percent for Japan. The government responded that this does not reflect fees for public universities but if one compares it to average private institutions’ fees it makes sense.

At the same time, the government severely cut spending for public universities. In the 2016 budget, the allocation was cut by RM1.4 billion, 27 percent compared to the previous year. The allocation for scholarships, bursaries and educational assistance was cut by RM812 million (23 percent). Thus poor students who depend on these grants suffered immeasurably.

For the following year, the total allocation for the 20 public universities were cut from RM7.57 billion to RM6.12 billion (19.23 percent). Unsurprisingly, places in public universities became scarcer. The KEADILAN Higher Education Advisory Panel – of which I was a member – received numerous complaints of excellent students not getting courses they applied for in university due to this trend.

Thus, students seeking higher education opportunities in Malaysia increasingly found that the opportunities were more likely available in private institutions – which are more expensive. Private institutions also treated PTPTN as an opportunity for them to get ‘easy money’ from the corporation while the corporation bears the risk of collecting the debt from the students when they graduate.

As many students grapple with unemployment (not having a job), underemployment (being employed in a job that pays below the expected wage of a graduate), low and stagnant wages in general, and a high cost of living, PTPTN repayment rates remain low. In 2015, the unemployment rate for those with tertiary education was 3.8 percent, compared to 1.8 percent for those with only primary education or no formal schooling. From 2011 to 2015, the accumulated losses for PTPTN reached RM6.5 billion. In 2015, the unpaid PTPTN debt for the year reached RM8.49 billion. The repayment rate was a measly 46.6 percent.

In order to overcome this, PTPTN has employed various methods. This includes listing borrowers under CCRIS, which affects the chances of errant borrowers from getting housing and hire purchase loans; blacklisting the passport of errant borrowers; no longer providing full PTPTN funding; and encouraging the withdrawal of EPF savings in order for graduates to make payments.

The listing borrowers under CCRIS and encouraging the withdrawal of precious retirement funds are counter-productive, and only pushes poorer borrowers into a vicious cycle. Instead, I would argue that repayment should only be made after earning a minimal salary – as it is done in the UK and Australia – say, RM4,000 a month.

In the long term however, it is clear that PTPTN is not sustainable. The solution is free higher education for public universities. After all, this is not a pipe dream but already a reality in Finland, Sweden, Norway, Germany and Scotland. Chile is introducing the policy for half of the poorest 50 percent of its students in 2016 due to historic high university fees (see above).

In addition, poor students should be given a monthly living and accommodation allowance. In 2013, it was estimated that to introduce such a policy in Malaysia would cost the country RM5 billion a year.

We should phase out PSD and MARA undergraduate scholarships overseas. This policy made sense when the country was lacking in universities in the 1970s and 1980s but does not make sense today. After all, many PSD scholars are allowed to migrate overseas after their university studies without paying a single sen to the government! Would not it be better to invest in our local public universities instead?

We should also build more public universities to reduce the demand on private institutions of higher learning. This will reduce the need for the fly-by-night private institutions and only allow the best to survive. At the same time, we can take a leaf from Germany’s experience in making free higher education possible by ensuring that technical and vocational education are attractive to avoid a glut of university graduates in the market.

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