KUALA LUMPUR: The amount of withdrawals from the Employees Provident Fund (EPF) made for education purposes last year more than doubled from 2015 mainly due to the National Higher Education Fund Corporation’s (PTPTN) collection efforts.
According to EPF’s 2016 annual report which was released today, the number of withdrawals for education purposes rose 31.82% to 86,725 withdrawals from 65,787 withdrawals a year ago.
The value of these withdrawals rose to RM1.46 billion in 2016 from RM578.18 million a year ago.
“The big jump is really in education, whereas in the past education was a smaller part of our withdrawal numbers,” EPF CEO Datuk Shahril Ridza Ridzuan told reporters at a briefing today.
Out of the RM47.41 billion approved withdrawals, education was the smallest component, making up only 3% of the total approved amount.
In terms of approved amount, the bulk of withdrawals were for Age 55 (47%), members’ investment scheme (13%), housing (13%) and other pre-retirement withdrawals (13%).
Shahril said EPF members who made withdrawals for education last year were likely using those funds to settle their PTPTN loans.
Asked to comment on EPF members using their retirement funds to settle education loans, Shahril said the new generation of students would be deprived if previous borrowers do not repay their loans.
“The reality is that, from a national standpoint, if you don’t repay your student loans, it is going to be very hard for the new generation of students to borrow money. So, you can understand from the social policy point of view, why it is important to collect the outstanding PTPTN debt so that PTPTN can be self-sustaining,” he added.
PTPTN started listing errant borrowers in the Central Credit Reference Information System (CCRIS) in January 2015. As of September last year, some 1.3 million PTPTN borrowers were listed under the system.
Borrowers who are blacklisted on CCRIS could find difficulty in obtaining loans or credit facilities from financial institutions.
In October last year, Higher Education Minister Datuk Seri Idris Jusoh said that PTPTN had collected only RM9.6 billion as of Aug 31, 2016 out of the RM18.311 billion that should have been collected.
It was reported that a total of 753,058 Malaysians who took PTPTN loans had yet to repay a total of RM5.191 billion.
Source: The Sun Daily