Everyone knows that higher education finance in Malaysia has been stumbling from one crisis to another for decades.
Now, PTPTN loans have ballooned to almost RM67 billion and the unsustainable debt identified by PTPTN itself in 2019 has reached such serious proportions that compulsory repayments through the tax system are now on the agenda. It is simply not true that fully funded higher education is unaffordable. To abolish loans and make undergraduate degrees essentially free at the point of study would cost only RM1.7 billion. If diplomas were included it would be RM2.3 billion.
The RM2-3 billion cost would be self-sustaining and grow over time with the graduate tax paying for new intakes first and eventually financing the whole system. The outstanding debt of RM67 billion should be taken away from PTPTN and placed into the Debt Management Office in the ministry of finance where it can be recovered through repayments with generous discounts, collected through income contingent taxes or monetised.
Private universities should jump at this proposal. Enrolment in fee-paying private higher education fell 23%, or 153,000 fewer students, since 2017. Low-fee public universities have 57,000, or 10.6%, more students now than in 2017.