Deputy Education Minister Teo Nie Ching said that the previous administration had been inconsistent in implementing policies with regards to borrowers who defaulted on their loan repayment in the past. — Picture by Yusof Mat Isa

KUALA LUMPUR, July 23 — The government will not blacklist Malaysians who default on their loans from the National Higher Education Fund (PTPTN) from leaving the country.

Only those who have been declared bankrupts — not those who have been inconsistent with payments — may be blacklisted.

Deputy Education Minister Teo Nie Ching said the ruling Pakatan Harapan (PH) coalition’s promise to lift the current travel ban on PTPTN defaulters was premised on its belief that every citizen has a right to freedom of movement.

She added that declaration move is necessary for the government to be consistent in its policies.

“Just because we are the government, we cannot act as per our whims. So if we need to bankrupt a borrower to include them in the blacklist, we will do it in future. We will take necessary actions,” she said during Question Time in the Dewan Rakyat today.

She noted that the previous administration had been inconsistent in implementing policies with regards to borrowers who defaulted on their loan repayment in the past.

She said those who took education loans from banks were only blacklisted from travel abroad after they were declared bankrupt, but not PTPTN borrowers who defaulted on their loans but had yet to be declared bankrupt; their names would immediately be placed on the Immigration Department’s no-fly list.

“So I feel that is a little unfair for borrowers who need the money to finish their studies,” she said.

Teo was replying Kuala Kedah MP Azman Ismail, who asked why PH lifted the travel ban for PTPTN loan defaulters and if there was any effective way to compel them to repay their study loans.

Earlier, Baling MP Datuk Seri Abdul Azeez Abdul Rahim had posed a supplementary question, asking what guarantee does PH has in place, to ensure that future study loan applicants are not affected, by deciding to lift the blacklist on errant loan defaulters.

He added that during Barisan Nasional’s (BN) era, over RM400 million in PTPTN loan repayments were collected, as compared to the RM245 million collected, up till May this year, owing to PH’s policies on the matter.

“As to why the collection deteriorated, there are two reasons. One is because, yes, PH is reviewing the repayment mechanism, and secondly, it is because of the announcement from the previous government, that is BN, which allowed a 12-month grace period, and not six months. These are the two factors which have affected the PTPTN collection.

“As mentioned by the (Education) Minister here before this, actually the full financial effects to the PTPTN loan, as well as to the new government, is still being studied, and we will do a detailed study as to how we are going to enforce our manifesto, and the study will only be known in August, when we table it to the Cabinet Committee,” Teo said, requesting that the Parliament allocate some time for the study to be completed.

Last month, PTPTN chairman Wan Saiful Wan Jan, said that 429,945 loan defaulters have been taken off the Immigration Department’s travel blacklist.

But he added that the defaulters who failed to repay their loans for tertiary education would remain listed under Bank Negara’s CCRIS system that collects credit information on borrowers.

* An earlier version of this article had some parts which were ambiguous, but this has since been corrected.