The Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) loan is an education loan scheme for students studying locally at private and public tertiary education institutions. It’s one of the most popular student loans in Malaysia due to its easy application process and wide availability. As of mid-2017, the government has spent RM43 billion to finance PTPTN loans since the corporation was set up in 2012. Here are 5 FAQs on this valuable education loan facility.
1. Is the PTPTN loan a good choice for those embarking on tertiary education?
Definitely. For one thing, the application process is fairly straightforward so it provides easy access to financing for those in need. Also, their approval rates are high so typically, you would have no problems securing the loan. Most importantly, the interest rate for PTPTN loans is exceptionally low (1% flat) compared to those of loans offered by other banks or credit facilities. This reduces the burden of repayment significantly.
2. Should I complete the repayment of my PTPTN loan early?
Yes, it’s always a good idea to clear your debts early on because as you get older, life’s responsibilities and commitments will start to pile up – you don’t need the extra headache of being saddled with growing debts! In an effort to encourage the public to repay their PTPTN loans, the Government recently offered several incentives:
- A 20% discount for those who fully settle their loans.
- A 10% discount for those who settle 50% of what they owe.
- A 10% discount for those who make repayments via salary deductions or direct debit, according to a schedule.
- A longer grace period (extended to 12 months from 6 months previously) for the public to settle their loans after completing their studies.
3. Can I be exempted from repayment?
Yes – if you’ve been a conscientious student and graduated with 1st Class Honours at the end of your course, you are exempted from repaying your loan! Of course, you still have to fulfil the criteria below to qualify for the exemption:
- You attended a full-time course.
- You completed your course within the period stated in the financing agreement.
- You did not receive any other overlapping education sponsorships.
- The course you took must be accredited by the Malaysia Qualifications Agency (MQA).
- You must submit the application for exemptions within 12 months of the date of your convocation.
You can get more details on applying for the exemption here.
4. What happens if I default on my PTPTN loan repayments?
You get blacklisted! Trust me, that’s not something you want. There may be several reasons you are behind in your payments:
- You’ve never taken steps to initiate the repayment process.
- You commenced repayments later than the stipulated timeframe of 12 months after the completion of studies (the earlier timeframe was 6 months).
- You pay less than the stipulated amount of your monthly repayments.
- Your repayment schedule has expired.
As a PTPTN loan defaulter, you will be restricted from leaving the country and face problems renewing your passport. You also run the risk of being blacklisted under the Central Credit Reference Information System (CCRIS). This means you may face difficulty obtaining other loans in future. According to data from the Malaysian Immigration Department as at end-November 2017, more than 50% of the 708,460 Malaysians blacklisted are PTPTN loan defaulters – pay up, people!
5. What are the other benefits of having an SSPN-i savings account, besides being able to apply for a PTPTN loan?
With a Skim Simpanan Pendidikan Nasional (SSPN-i) savings account, you will have access to tax relief:
- Parents and adopted parents/legal guardians who open an SSPN-i account for their children will be given tax relief up to a maximum of RM6,000 per year, subject to the total net savings in the current year.
- Parents who file their taxes separately and have opened separate SSPN-i accounts for the same child will be given tax relief up to a maximum of RM6,000 per person, per year.
- Parents who file joint assessments and have opened separate SSPN-i accounts will be given tax relief up to a maximum of RM6,000 per year.
However, the benefits of having an SSPN-i savings account extend far beyond tax relief. To find out more about the other benefits, take a look here.