Unpaid student loans amounting to RM39 billion nearly same as 1MDB debt: Malaysian PM Mahathir

Malaysian PM Mahathir Mohamad said the amount of money owed by people who took study loans from the National Higher Education Fund was about RM39 billion (S$13 billion). PHOTO: EPA-EFE

KUALA LUMPUR - Malaysian Prime Minister Mahathir Mohamad said on Saturday (Aug 11) that the amount of unpaid student loans is almost as much as the total of beleaguered state fund 1Malaysia Development Bhd's (1MDB) debts.

"Do you know how much money is owed by people who received PTPTN? It is about the same as the money lost through 1MDB, RM39 billion (S$13 billion)," Tun Dr Mahathir said, referring to the National Higher Education Fund, otherwise known by its Malay acronym PTPTN. It is a government body that provides study loans to Malaysian university students.

"That's how much money that has not been paid to the government for what it spent on you to give you a good education and therefore opportunities for a better job and a better income," he said, addressing students gathered at the Malaysian Student Leaders summit here.

Earlier, he said that the Japanese were a good example of hardworking and successful citizens, adding that they had a strong sense of shame, and committed harakiri if they felt they had failed in any way.

"I do not know in Malaysia if we have sense of shame because our sense of shame is when we are badly dressed or caught stealing something," he said.

"You should feel the sense of shame when you fail to do something."

His comments appear to be a step away from his coalition Pakatan Harapan's manifesto promise to defer payments for the PTPTN student loans until borrowers earn at least RM4,000 a month. It had also pledged to lift travel bans imposed on defaulters.

Former Umno youth chief Khairy Jamaluddin had recently urged the new PH administration not to fulfil this manifesto promise as it had serious financial implications for the country's economy.

"I will forgive the government if it does not fulfil (this)," he said.

Education Minister Maszlee Malik also recently reminded borrowers to repay their debts once their pay is more than RM4,000 monthly.

During his speech on Saturday, Dr Mahathir also said that leaders should not steal, as this would lead to their downfall.

"Things that don't belong to you, grows in you, and that habit will be your downfall. I think you have seen this thing happening around you. I am not making reference to anybody. Just a general statement," he said, eliciting laughter and claps from the audience.

A report by the Auditor-General stated that debts accumulated by 1MDB inclusive of interest amounted to RM74.62 billion in Oct 2015, and RM55 billion before interest.

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