Taiwan – Malaysia university collaborations MUST be win-win!

The flow of tertiary students has been only one-way: only from Malaysia to Taiwan. Very few Taiwanese students are found in Malaysian colleges and universities. This article set out to find ways in which a more balanced and mutually beneficial framework of relationships between Taiwanese and Malaysian institutions of higher learning could be forged.

There must be ways to check the current one-way flow of students from Malaysia to Taiwan for the benefit of institutions and students of both nations. The prospect of losing another 5,000 high school graduates students each year will be bleak for the private colleges in Malaysia. The cut-throat competition is getting deadlier this year!

Commentary (Feb 26, 2017):

This is the third and final part of my series of articles based on my public lecture, “Malaysian higher education: past, present and likely future” delivered at Tunghai University, Taiwan where I was a guest of Professor Lin Hsiou-wei.

The aggressiveness and seemingly well-funded campaigns by Taiwanese universities (including high-ranking ones) to recruit Malaysian students to fill up the large gap in capacities to student had mainly only receiving good attention in Malaysia’s Chinese press with the English press giving it scanty reports. The majority of the private colleges in Malaysia still do not have strong relationships with Taiwanese universities. This could be based solely on the uninformed assumption that students must be very proficient in Chinese language in order to study at tertiary level in Taiwan. Well, many Taiwanese universities, in line with the trend in China, have been having undergraduate and postgraduate degree programmes entirely delivered in English for some years now. In addition, despite the difficulties in scoring grade A+ for Chinese language at national senior high school examination in Malaysia (Sijil Pelajaran Malaysia or Malaysian Certificate of Education) there are still a substantial number of students taking the subject each year. Hence there would be many high school graduates with the requisite proficiency in Chinese each year to study in Taiwan. Of course some very savvy private colleges have woken up to this Taiwanese “fear factor” lately.

I had done a bit of research on the data I obtained from various sources which showed a very disappointing trend: the flow of tertiary students has been only one-way, that is from Malaysia to Taiwan. Very few Taiwanese students are found in Malaysian colleges and universities. I then set out to find ways in which a more balanced and mutually beneficial framework of relationships between Taiwanese and Malaysian institutions of higher learning could be forged.

I presented this in my public lecture but I am not fully convinced that my message was getting through to right people in Taiwan. I do hope that somehow someone will see the imbalance and try ways to address this. I for one do not subscribe to the notion that Taiwanese universities would intentionally bring about the decimation of private higher education industry in Malaysia. Hence this seemingly zero-sum game will need to be altered, and altered fast for the long term betterment of people of both Taiwan and Malaysia.

I have been asked by some of my readers and friends to translate this article into Chinese in order to attain my aim. You never know, I might take up the challenge later!

An article entitled, “Facing brain drain, Taiwan looks to poach Malaysian students” appeared on September 15, 2013 in Malay Mail Online. It was in response to the push by Taiwan to target Malaysia for new students to fill in excess seats available in their 160 or so universities and colleges. The alarm bells were starting to ring in the recruitment offices of many Malaysian private colleges in reaction to this news.

Dr Chow Yong Neng (second from left) receiving a warm reception from Professor Lin Hsiou-wei (fourth from the eft) and his staffs at Tunghai University in Taichung, Taiwan

Then in late May 2016 the Sun Daily reported that there are 15,000 Malaysians already studying in Taiwan. Around the same time Sin Chew Daily in turn reported that Taiwan will target to have a total of 25,000 Malaysian students studying in Taiwan within the next two years, an increase of 5,000 on average in 2017 and 2018 respectively.

With the “drought” of students hitting the industry in 2016, the Malaysian private higher education sector is already facing a collective lowering of enrollment caused mainly by the increased in Sixth Form enrollment for 2016. The further prospect of losing another 5,000 students on average caused the alarm bells at the recruitment offices of private colleges in Malaysia to ring non-stop ever since!

One cannot begin to imagine the impact of losing another 5,000 high school students each year will do to the private higher education sector in Malaysia. Table 1 shows the number of Malaysians studying in Taiwan from 2013 to 2018 (2016 to 2018 figures were projected).

able 1: The number of Malaysians studying in Taiwan from 2013 – 2018 (Data Source: 2013 – http://focustaiwan.tw/news/aedu/201412230014.aspx and 2014 & 2015 – http://english.moe.gov.tw/ct.asp?xItem=16738&ctNode=11414&mp=1)

The Taipei Economic and Cultural in Malaysia kindly shared with this author the number of Taiwanese studying in Malaysia (provided by the government of Malaysia in October 2015). A total of 116 Taiwanese students were studying in Malaysia in 2015 with only 96 students being in private colleges. These figures show the severe imbalance in the movement of students between the two countries.

So what chances do small and medium sized Malaysian private colleges (and even some of the larger ones) have in competing against well funded and highly reputable Taiwanese universities and colleges which have been very liberal in awarding scholarships lately? This is made worse by the fact that the only silver lining that Malaysian private colleges had, which is the delivery of academic courses in English is also being eroded. Many Taiwanese universities and colleges with teaching staff who are trained in USA, UK or Australia are offering international academic programmes that are fully delivered in English.

Can this seemingly zero-sum game of student recruitment be reconfigured for the long term mutual benefits of the students and institutions of both countries?

This author believes that it is not the intention of Taiwan to create the “fear-factor” in Malaysian private higher education. A zero-sum game will always have a winner (Taiwan) and a loser (Malaysia). However, given the strength in the “New Go South” policy of President Tsai Ing-wen, is there any way players in higher education in both Taiwan and Malaysia can collaborate on a “1 + 1 = 4” principle?

“Collaboration outweighs competition” should always be the motto when it comes to Taiwanese-Malaysian higher education institutions’ relationship. For the “1 + 1 = 4” principle to be realised, there must be a think-out-of-the-box collaboration model between the two countries’ universities and colleges.

A "think out of the box" model of collaboration between Malaysian and Taiwanese colleges and universities will replace the one-way flow of students from Malaysia to a bidirectional flow of students between Taiwan and Malaysia to the benefit of both nations.
A “think out of the box” model of collaboration between Malaysian and Taiwanese colleges and universities will replace the one-way flow of students from Malaysia to a bidirectional flow of students between Taiwan and Malaysia to the benefit of both nations.

Something must be done by both countries to address the severe imbalance in the flow of students which at present, for all intent and purposes is unidirectional: only Malaysian students would go to Taiwan and essentially there is insignificant flow towards Malaysia.

Hence for an equitable collaboration to work, the flow of students MUST always be bi-directional. “Share and share alike” shall be the key to successful collaboration efforts between institutions of higher learning of both countries.

To make this work, Taiwanese universities and colleges must not treat their Malaysian counterparts as “feeder colleges” but as equal partners in the sharing of students. They must be prepared to send to their Malaysian partners an equivalent number of Taiwanese students to make this work.

By having (and sharing) Taiwanese and Malaysian students we can create the “1 + 1 = 4” principle. For starter, instead of recruiting Malaysian students directly to attend all 4 years of undergraduate studies in Taiwan, we can have a modified “2 + 2  model”.  Malaysian students will be recruited by a Malaysian institution partnering a Taiwanese university or college. These Malaysian students will stay in Malaysia to complete the first part of their studies (either in diploma or in a homegrown degree programme) before credit transferring to the Taiwanese university. At the same time, the Taiwanese university partner will send a similar number of its students to the Malaysian counterpart. These Taiwanese university students could be studying on a “student exchange”, “study abroad” or credit transfer mode. So long as there is an equitable flow of students each year, both institutions stand to gain extra headcounts. Thus both institutions will have an additional student for everyone that it has sent to its partner institution, thereby creating two student headcounts on both sides, making the  “1 + 1 = 4” principle a reality.

There are also other variations to this model aside from the example above where a bidirectional flow of students between Taiwan and Malaysia can be effectively implemented:

  • Setting up dual awards in undergraduate and postgraduate programmes between institutions of higher learning in both countries (students from both countries can opt to take up both or one of the academic awards).
  • Taiwanese universities leveraging on their Malaysian partner colleges/universities to tap into the non-Chinese speaking students market (instead of just targeting the Chinese Malaysian, Taiwanese universities, through their Malaysian partners can widen their reach). These students can be placed in the Malaysian partner institutions for preparatory courses (e.g. Chinese proficiency classes) before their stint in Taiwan, thereby sharing of such students between the two partners.
  • Tapping into “seniors” and “executive development” markets in both countries by co-branding of programmes and deliver part of these programmes in the partner’s institutions on “short study visits” basis for example utilizing Malaysia’s Mobility Programme.

With a deeper collaborative relationship, both the Taiwanese and Malaysian institutions can then leverage on each other’s strength, brands and reputation to tackle other non-traditional areas of collaboration. Research and development, consultancy projects, bidding for research funding and commercialization of research are some of the “offshoots” of such collaborations. Essentially the Taiwanese and Malaysian institutions can then leverage on each other to expand their “market” and effectively reach into each other’s territory to be fully transnational.

Having bidirectional flow of students will benefit Taiwanese students by giving them exposure to Malaysia in an in-depth manner which would increase the cultural and economic intertwining of both nations, directly increasing the sphere of influence of Taiwan and still adhere to the New Go South policy of President Tsai, albeit with some modifications.

All it takes now is the collective willpower of the leaders of Taiwanese universities to put this into action and to engage with their counterparts in Malaysia (mainly the private colleges and universities) to put the current zero-sum game to bed.

The ball is now in the Taiwanese court!

Read more on Part 1: How many colleges and universities can Malaysia truly sustain?
or Part 2: Filling up Malaysian colleges’ seats – a tall order indeed

The bulk of the content of this article came from a talk given by the author as a guest speaker of Tunghai University, Taichung, Taiwan on July 28 2016 entitled “Malaysian higher education: past, present and  likely future.”

Filling up Malaysian colleges – mission impossible?

3 Key Questions are raised in this article:
(a) What are the number of new students we need to fulfill the aspirations of the power that be for the National Education Blueprint 2015 -2025 to bear fruits?
(b) What are the projected number of new students from existing sources, both local and foreign?
(c) If there is indeed a deficit, what other sources of new students that Malaysia can muster?

Commentary (Feb 23, 2017)
When I was preparing for my public lecture at Taiwan’s Tunghai University ( entitled “Malaysian higher education: past, present and  likely future.”) in June 2016, I was researching on the data of the numbers of local and foreign over a few years and crunched these numbers to see if these have the potential to fill up the large collective capacities of Malaysian colleges and universities which are already having surplus “seats” at present.  While I was pondering the implications brought about by the National Education Blueprint 2015-2025 (Higher Education) it suddenly appeared clear to me that my research work should indicate if fulfilling the numbers indicated by the power that be may be a mission impossible. I then went ahead to ask three crucial questions and attempted to analyze these with the data available to come up with my viewpoints.

In this article (which was written in August 2016 & updated in September 2016 when newer & more accurate data was available after my public lecture in late July 2016), I tried to lay out the bare facts based on my asking three crucial but simple questions:

(a) What are the number of new students we need to fulfill the aspirations of the power that be for the National Education Blueprint 2015 -2025 to bear fruits?

(b) What are the projected number of new students from existing sources,  both local and foreign?

(c) If (b) shows a deficit, what other sources of new students that Malaysia can muster?

The article that follows, the second one in a series of three, was first published in Han Chiang News portal in August 2016. My former colleague, Ms Kristina Khoo had produced the infographics to help readers to comprehend the data presented better.

First article in the series: How many colleges and universities can Malaysia truly sustain?

Those of us who serve in the higher education industry can finally breathe a sigh of relief when the National Education Blueprint 2015 – 2025 (Higher Education) (NEBHE) was unveiled on April 07 2015.  At least the strategic direction for the higher education sector for the coming 10 years was charted.

However, one important segment of the higher education sector was not adequately covered. The private higher education sector did not get the detailed attention that it deserves. This is surprising given the fact that the private sector is responsible to educate over 40 per cent of Malaysian students pursuing tertiary studies.

Under the NEBHE, the entire tertiary education sector should see the enrollment rate rise from 36 per cent  (1.42 million) in 2012 to 53 per cent in 2025 (2.49 million). To achieve this different sub-sectors within the higher education sector will have a differential rate of growth.

The private higher learning institutions are expected to grow its enrollment by 5.1 per cent annually whereas the corresponding rate of growth for the public universities is 2.6 per cent per annum. The largest rate of growth will be for private and public technical, vocational education and training (TVET) institutions at 7.8 per cent per annum while the remaining state-owned tertiary institutions (operated by different ministries) will see a modest 1.4 per cent annual growth.

All these impressive figures give the private higher learning institutions badly needed sense of the nation’s direction and how they could play their collective role. However there are three crucial questions that were not addressed by the NEBHE….

Summary of findings (click to view bigger image)

Summary of findings

Question 1: What is the number of new students that we need to recruit in 2025 if we are to attain the targets set by the National Education Blueprint 2015-2025 (Higher Education)?

Typically Malaysian students studying in private universities and colleges enter these institutions straight from high school after taking their Sijil Pelajaran Malaysia (equivalent of “O” level) and they will take about 4 years to complete their undergraduate studies. Their counterparts studying in public universities will be required to have pre-university qualifications such as STPM (equivalent of GCE “A” level), Matriculation or similar qualifications, and they only need about 3 years to graduate. Students in the TVET sub-sector will take around 1.5 years  to 2 years to complete their studies. To estimate the number of new students for each year for different sub-sectors, all we have to do is to divide the current total number of students enrolled in that sub-sector by the average years that it takes a typical student to graduate. So Table 1 and 2 summarise the number of “freshies” (new students) that each sub-sector needs per year for the reference year of 2017 and 2025 (as provided by the NEBHE).

We use 2017 as the “reference” year for two major reasons. Firstly we could estimate (based on available data) more accurately the number of students for each of the six sources and this data is more current and reflects the latest changes in the environment of higher education sector that are not so well reflected in the data of 2012. The total enrollment in each sub-sector in 2017 was calculated based on the corresponding compounded growth rate as stated in the NEBHE. For example, the Private Institutions sub-sector was estimated to grow by 5.1 per cent from 2012, thus the total enrollment of 555,000 was calculated from the base-year (2012) figure of 455,000 compounded by 5.1 per cent over 4 years

Table 1: Estimation of new students needed for each sub-sector in 2017

Sub-sector [annual growth rate] Total Enrollment (‘000) Typical study duration New enrollment needed (‘000)
Private institutions [5.1%] 555 4 139
Public universities [2.6%] 604 3 201
Public & private vocational institutions [7.8%] 335 2 167
Other governmental institutions [1.4%] 182 1.5 121
Total 1494 629

Let us use the annual growth rates for each sub-sector to estimate the compounded enrollment of each and in turn work out the number of “freshies” required by each sub-sector in 2025 (as shown in Table 2).

Table 2: Estimation of new students needed for each sub-sector in 2025

Sub-sector [annual growth rate] Total Enrollment (‘000) Typical study duration New enrollment needed (‘000)
Private institutions [5.1%] 867 4 217
Public universities [2.6%] 764 3 255
Public & private vocational institutions [7.8%] 656 2 328
Other governmental institutions [1.4%] 205 1.5 137
Total 2492 936

Hence, based on our simple calculations, for 2017 we will need about 629,000 new students to feed into the entire tertiary education sector in Malaysia. Based on the same principle we can estimate that by 2025 (as shown in Table 2), to provide for a total enrollment of 2.49 million, we shall need to have around 936.000 new students.

Question 2: Do we have enough youngsters to “feed” into the entire scheme of work?

To answer this question, we shall need to take a look at the sources of students for tertiary education. Traditionally there are six main sources of students for tertiary education institutions.

We can estimate the figures for each sector for the year 2017 and 2025 based on the following categories of “sources”: (a) Sixth formers; (b) Matriculation students; (c)  SPM students; (d) International students; (e) Independent Chinese high school students; (f) private school students.

Based on the population estimation and projection published by the World Bank, the population of 17, 18 and 19 year-olds in Malaysia by 2025 will be 560,000, 566,000 and 574,000 respectively. These figures are matched by the Malaysian Statistic Department’s projection of the nation having a total of 2,573.500 fifteen to 19 year olds by 2025, giving an average of around 515,000 persons per year group. These demographic data provided the basis from which the estimation of the number of students for each of the six categories of sources stated and presented in Table 3.

Table 3: An estimation* of the sources of students for tertiary institutions in Malaysia for 2017 and 2025

Sources of students Estimated number (‘000) For 2017 Estimated number (‘000) For 2025
(a) Form 6 42 60
(b) Matriculation 27 30
(c) SPM (Form 5) 441 400
(d) International students 43 71
(e) Chinese independent high schools (UEC) 15 19
(f) Other private schools 10 16
Total: 578 596

*Some of the data presented in this table has been revised (Sept 23, 2016) in consideration of more accurate data being obtained by the author after publication.

We assumed that both the (a) Form 6 and (b) Matriculation student population will only have a modest growth over the 9- years period. Basing on recent trend, we expected that the number of SPM school leavers to continue to decline yearly and will drop from 441,000 in 2017 to around 400,000 by 2025. We estimated (d) International students number from the figure of around 150,000 published for 2016 where on average overseas students spend around 3.5 years in Malaysia (we divided 150,000 by 3.5) and did likewise for their numbers by 2025 based on the published target of 250,000 international students by 2025 as stated by the NEBHE. As the collective capacities of the (e) Chinese independent high schools are already in saturation point in 2016, there should be a modest growth over the next 9 – 10 years in the number of new students that they are able to accommodate and hence the corresponding slow growth in the number of students graduating from these high schools. With the massive growth in numbers and capacities of the private schools and international schools sub-sector, it is prudent to estimate that the number of students graduating from this subcategory will double over the next 9 years.

By just comparing the answers to Question 1 and 2, we can see that, based on our estimation, even in 2017 there will be a “shortfall” of around 33,000 students if the target enrollment numbers for each subcategory of tertiary institutions are to be met. This “shortfall” shall widen greatly over the 9 years to 2025 when there would only be a “supply” of 611,000 students but with a collective capacity / target number of around 936,000. A huge deficit of around 350,000 students.

Question 3: Do we have any way to source for 300,000 – 400,000 students per year to fill up the collective capacities of our colleges and universities by 2025?

A Malaysian Statistics Department report  stated that, 55.5 per cent of the Malaysian labour force had only a secondary level education, 15.5 per cent had primary level education and 2.6 per cent had no formal education. This means that if we just focus only on those in the labour force with secondary level education, with around 14 million in the total labour force if we just send 4 -5 per cent of these people a year to tertiary institutions, there will be over 300,000 students to make good the shortfall.

However, with increasing participation rate of school leavers in tertiary education (already stated at 53 per cent by 2025) and a massive upskilling of the labour force to tertiary education level, there will be a fast “depletion” of low skilled labour force in 10-15 years. Unless there is a massive growth in the population of 18-year-olds, the country will still face with the issue of having insufficient number of students to fill up the capacities of her colleges and universities.

Perhaps the power that be should instead be looking into consolidation of the whole tertiary education sector. Maybe it is prudent to take a re-look at the ambitious enrollment targets set forth by the NEBHE.

The bulk of the content of this article came from a talk given by the author as a guest speaker of Tunghai University, Taichung, Taiwan on July 28 2016 entitled “Malaysian higher education: past, present and  likely future.”

Registry of Ph.Ds – how it could be best administered

The establishment of the Registry of Ph.D Holders will have one very clear “side-effect”. It will go a long way in separating the wheat from the chaff but since not all accredited overseas institutions award Ph.Ds, the list of institutions in the Registry may not fully represent all accredited overseas institutions but it does provide at least the first list of institutions where their Ph.D awards are recognised in Malaysia.

Commentary: (April 11, 2017):
On Apirl 03, 2017,  Deputy Minister of Higher Education, Datuk Dr. Mary Yap Kain Ching reported that her ministry will roll out a registry of Ph.Ds soon. But this will be confined to Ph.D holders from local institutions. This is a step in the right direction indeed. However one major problem area, those using fake Ph.Ds from foreign institutions or from degree mills are not covered. Based on my own gut feeling, the bulk of the pretenders are in the latter crowd. So this Ph.D registry may only catch the tip of the ice-berg.

I would like, if one of my readers forward my suggestions below to the power that be to tackle the issue still hiding below the ice-berg!

One comment in the above news report that caught my eyes was what Datuk Dr. Mary Yap said, “We all know those who said they finished their PhD within 10 months are fake PhD holders,”

In fact, the good Datuk took 5 years to complete her Ph.D and my learned beautiful and multi-talented friend (from our Doctorate Support Group in Facebook), Dr. Soo Wincci (#drsoowincci) took 6 years to complete hers proved that there is no short cut!

There has been a lot of news for the past few weeks on the need to set up a registry of Ph.D holders in Malaysia. These calls have been brought about by the increasingly serious issue of bogus Ph.Ds and people claiming to have honorary doctorates etc. which was proven to be bogus. I have also made references to this matter in an earlier post and there is a commentary on this issue recently.

In October 2016, the National Council of Professors (NCP) in Malaysia called for the setting up of this registry and hinted that they be given this task by the power that be. However, since not all Ph.D holders are members of this council, and by that, not many Ph.D holders actually are professors (and not all professors in Malaysian universities hold Ph.D or professional doctorates), this body may not be the best representation of the nation’s academic-intellectual power. The NCP further suggested that some charges be levied for the administration of this registry which implies that there may be some monetary gain by the said organisation should they be granted this task.

It was reported that the Ministry of Higher Education (MoHE) would be working on setting up a Registry of Ph.Ds for Malaysia where all Ph.D holders from local universities (both public and private) would automatically be added to this Registry. It was mentioned that Malaysian Ph. D holders with their doctoral degrees awarded overseas will have to seek verification of their doctorate degrees. So far I have not been able to find the mechanism for such a verification process. Needless to say, this verification process will have to be effective, efficient, fair and transparent. There is also (as mentioned earlier) the need to sort out a cost effective way of administering this Registry.

I think perhaps the following suggestions might be considered by the power that be before deciding on how this Registry is to be administered.

  1. Ownership:
    The MoHE should be the custodian of this Registry which should be “owned” by the Malaysian Government. This will ensure that no parties can gain any financial advantage for owning the data the Registry so contained or make monetary gains for the administration of the Registry. The MoHE’s Registrar General and his/her staff is the right team to handle this since they have ample experience handling the registration of around 500 active private colleges and universities where many of the Ph.D holders are already in the MoHE’s databases. This will make cross checking of data and verifications work more effectively accomplished.
  2. Criteria of admission:
    There must be a clear, but simple to use set of criteria for admission to the Registry. The admission of a Ph. D holder should be done once all the criteria have been met. There should not be any hint of any “approval” step or steps in the process. Anyone with a bone fide Ph.D (that is verifiable) shall be admitted to the Registry. No one should be denied a place in the Registry because of his/her colour, creed, ethnicity, religion or political affiliation. Getting on the Registry should be considered the same as getting on to the electoral roll –  it is a right and not a privilege. Thus the cost of registration should be made as low as possible where I would suggest that the MoHE be granted a yearly budget by the Treasury for the administration of the Registry. We need to stress the fact that not all Ph.Ds are earning big bucks. There are the freshly minted ones who may not have a job or the senior ones who have already retired. Thus the cost to register in this Registry shall not be made a deterrent to those who may not be so financially endowed. RM10 – RM50 should be the the range for the registration fees for  the administration of this Registry.
  3. Transparency & Peers Review:
    The entire process of registration should be fully transparent to give the Ph.D holders and the other stakeholders confidence in the entire system. Perhaps the transparency can be extended to the data held such that each registrant will be having a “page” where her/his expertise, papers published etc. (but not personal details) will be listed. This will serve one further purpose: anyone who have slipped through the filtering process may be “caught” at this stage as the page will be open to anyone on the internet. Peers review is a very powerful tool for the Registry administrator to use. The power that be should take a leave from the career/job/hiring social medium platform, Linkedin where few of the members have (or dared) to put in false credentials as these could be easily “discovered”. Perhaps for more senior Ph.D holders, the need to verify their credentials may not be that stringent as many would have Linkedin profiles where their respective “contacts” would have studied and scrutinized their credentials before accepting them as “contacts”.My Linkedin profile is more credible not because of my own data but the “contacts” that I have who are more established scientists, entrepreneurs etc. than yours truly had verified my credentials and are willing “to be seen” as a part of my network. This philosophy is actually the key success factor of Linkedin. “I am credible because my many contacts have verified my credentials directly by linking with me”. It is not the same as Facebook! Thus the Registry may have features that mirror that of Linkedin to allow senior, established Ph.D holders to help in the verification process in the “Linkedin” way. In fact, I would risk saying that the MoHE should discuss with Linkedin to find a way to maximize the “social verification” features of this platform and the MoHE may be well advised to considering “putting” the Registry on this platform.
  4. Leverage on Foreign Universities:
    All bone fide institutions of higher learning worldwide will want their academic awards be recognized. This should therefore be the key to getting foreign institutions to contribute to the work needed to administer the Registry. However there are key questions that the power that be needs to have answer to, namely:
  • Is there a way to make sure that overseas universities submit themselves to be included in the Registry?
  • Can we make it simple and accept all universities that are accredited in their home countries?
  • Can we make use of the diplomatic missions in Malaysia to be responsible for keeping this list updated for their respective countries?
  • What about those countries without representation in Malaysia? Can we use some international association like The Association of Commonwealth Universities … even the listing for Malaysia is not complete with only 21 institutions (with many Malaysian public universities not listed the organization)…

MoHE can also leverage on the foreign universities to shoulder a big part of the burden in verifying their own graduates’ credentials. It is after all, to the very institution’s advantage to make sure that their graduates are fully recognized. Thus the MoHE could in fact make a “standard” arrangement with the education authorities of each of these nations so that the list of new Ph.D holders (with verifiable details provided) each year (and that of previous years) could be supplied to the MoHE by each interested institution. My son’s alma mater, the University of Nebraska-Lincoln, USA even has a website that provides verified details of its graduates principally for the benefits of prospective employers. Thus giving them confidence of the data held at the website and a way to cross check the resume of UNL’s graduates readily. Perhaps MoHE can tap into this sort of databases to make the verification process a lot faster and effective.

The establishment of the Registry of Ph.D Holders will have one very clear “side-effect”. It will go a long way in separating the wheat from the chaff but since not all accredited overseas institutions award Ph.Ds, the list of institutions in the Registry may not fully represent all accredited overseas institutions but it does provide at least the first list of institutions where their Ph.D awards are recognized in Malaysia. What the Registry also need is a “compliant” segment where if anyone’s credential is challenged, there is a fast-track way for the complaint to be studied and verified. There must also be a heavy penalty for the supply of false information by the registrants. Thus I suggested that the Registrar General’s office shall be the best authority to deal with this as there are already some provisions in ACT 555 and related acts of parliament that have penalty clauses which can be used.

When the Registry is ready, I shall be one of the first to want my name to be on it!

Let your children chase their own dreams!

I mooted the idea of writing a commentary about Malaysian parents, especially Chinese Malaysians wanting to dictate the fields of studies for their offspring way back in January 2014. This was because I regularly get requests from acquaintances, friends, and families to provide “free advising” to their college-going children.

As a freelancer (on and off since 2011), the idea of providing a fee-based advisory service on higher education opportunities and options was a very attractive one. I even managed to get myself appointed as a recruitment adviser by a few overseas institutions. But to base my bread and butter on this kind of work is not exactly child play. It is a pay-on-success-only kind of arrangement. You will get nothing for the time, effort, parking charges, restaurant tabs etc. that you have spent on a student unless the parents concerned sign up their offspring. I had wasted many hours and lots of expenses giving this sort of free advising.

Then I decided to levy a small charge of RM100.00 (about US$28.60 in Dec 2014) for providing unbiased advising. After all, people have no issue paying for professional advisory from their lawyers, accountants, etc. why not education advisers?

Did I earn any income for the advising I have been providing to my “clients”? You may incline to ask. The answer is absolutely NIL!

Either all the people who have engaged my time, knowledge and services are cheapskates or they just did not know that as a freelancer I need to generate some income for my time. So I hope this article will help in a way to sow the seeds for my friends, relatives, and acquaintances to pay my bills! People should be aware that unbiased advice comes with a price tag and mine is a modest RM100.00 only! Doesn’t your kid’s future worth this small sum?

So have I stopped all these pro bono work? Not exactly.  I just become more incline now to refer requests for free education advising to the many education establishments directly and have become very “economical” with my advising unless the request comes from a close friend or relative.

Whatever the message this article below conveys, I would like all parents to do what I have done. Guide your children in their choice of studies which may or may not lead to a career in the same field, but let them chase their own dreams. Whatever their choices, your job as parents is to support them both in spirit and in Ringgit (or US$). Let the kids realize their own dreams. They need not take up the profession of their choice of studies. If they find out that they have to change direction, don’t get mad. It is part and parcel of learning to find a suitable path.

Just look at me. An agriculture graduate who was trained to be a farm manager or farm adviser. The fact is, after graduating with an Honours degree in General Agriculture from the Queen’s University of Belfast in 1985, I have never worked in the field of agriculture. In fact, for 18 years now, I have not worked in the field of expertise I gained from my postgraduate studies, plant tissue culture! Instead, I become an education management specialist.

Luckily for me, the field of plant tissue culture progresses at a snail pace and an armchair “old dog” lab scientist like me can still find my expertise being valued and fortunately, I can still keep pace with developments. But “old dogs” still need to learn new tricks, that is where Massive Open Online Courses come in handy, but that is another story! The broad-based agriculture degree prepared me well to lead the life of an academic when in the heyday of private college growth in the late 1990s and early 2000s this broad knowledge helped me to be a much better educator. The farm management, especially farm marketing and accounting courses that I studied helped to horn in my entrepreneurial skills. The list of applications for knowledge I had picked up during my university days is very long indeed. There again, I spent almost 3 times longer than the average British-educated person in university!

It may be great to know that (and I am very proud to be associated with this man) one of my buddies, Dr. Michael Leong who was trained as a surgeon became a serial entrepreneurs (who retired a very wealthy man before he was 48 years old) is one of those people who did not follow the typical career path of a medical doctor! I don’t get to meet with Micheal who is based in Singapore often enough, but every time we meet he would insist on buying the drinks and food and I usually could not argue well with a self-made multimillionaire on that!


By Dr Chow Yong Neng
12/27/2014 5:00:00 PM
Young students must be given the freedom to realise their own dreams

Being an 18-year veteran of the education and training industry has its perks. Every year, especially after the Sijil Pelajaran Malaysia (SPM) examination (a public examination for all Malaysian high school graduates), I get invitations to lunch or dinner from friends and relatives to provide advice to their offspring on the next step after high school.

I would be expected to give my unbiased and learned views. My round of questions would usually not solicit much of a reply from the young student involved. Dad or mum knows best is the theme. Mostly, the kid realistically has no say in his choice of studies.

Many parents, even those who have had the benefit of university education, do not understand the real reason for their children having a university education. The notion, especially among Malaysian parents, is that students must choose and seek their career in their respective fields of undergraduate studies. That is why parents are so concerned and usually take over the decision-making in the fields of studies that their children should undertake.

A former colleague, Dr. CGB, who was a practicing engineer and lecturer in structural engineering, once commented: “Most fresh graduate engineers are half-baked; we need to put them through at least three years of rigorous industrial exposure before they are ready.”

I think Dr. CGB’s view can be applied to almost all fresh graduates. University education is a means to provide students with the opportunity to learn new knowledge, skills and social networking. A person holding an undergraduate degree demonstrates to the world that he has the ability to think, analyse and assimilate factual knowledge to solve problems better than those without such an advantage.

That’s why I had adopted a liberal view in helping my own children choose what they want to do. I exposed them to what different career choices entail and explained what they need to do to be in various different professions.

My son, having learned these quickly, discarded the idea of being a medical doctor right from the age of 15 and decided by the time he was in Form 4 that he would like to study mathematics, finance or actuarial science. He settled on the finance option when he embarked on his tertiary education.

Exposing your children to different professions at an early age lets them gain the knowledge that they need to make the right decision on a course of study when the time comes.

As parents, it is our duty to guide our children on their choices of study. The key phrase here is “their choices”. We should be flexible and should refrain from deciding on the choice of study for them. Young students must be given the freedom to realise their own dreams. They should not be expected to accomplish and live the dreams of their fathers or mothers. Parents force their children to take a study choice that they do not have an aptitude for, there may be damaging consequences.

While you are explaining and exposing different professions and career choices to them, never attempt to look down on non-traditional choices of study. Not everyone is interested to be an engineer, doctor, accountant, lawyer or banker. Many people who did not choose to be in any of these professions in their university studies ended up doing just as well or better.

In 1982, I had chosen general agriculture as my choice of study. My parents, who were paying for my education, supported my choice without hesitation. I met many fellow Malaysian students at the Queen’s University of Belfast who were reading medicine, engineering or accounting. Some of them thought I chose to read agriculture because (a) I must have had poor grades for my GCE ‘A’ levels, (b) I must have some predilection for the smell of cow dung or (c) both.

They were gobsmacked when they learned that with two A’s and two B’s, I was offered to read medicine, engineering or accounting but I had chosen agriculture instead. I like biology and the most practical form of biology was agriculture.

Interestingly, you would think that an education consultant would be able to earn a living from satisfying regular requests for unbiased advice. In reality, no one seems to be willing to pay my consultancy fees of RM100 per hour. My friends and relatives either do not think that my advice is worth RM100 or they think I am too wealthy and therefore will not need this small fee.

[This article was originally published on November 1st, 2014 edition of Focusweek  & is re-published in The Heat Online on December 27, 2014]

Comparing Malaysia’s student loan crisis with that of the USA

Malaysia has its own version of student loan crisis. This article gives an in-depth analysis of the crisis, identifies great gaps in data & compares Malaysia’s case with that of the USA.

My article entitled “Looming student loan crisis” was published on August 23, 2014 in the now defunct print weekly, The Heat. An edited version of the same article also appeared recently in Theantdaily which was also syndicated by Malaysia Today.

The idea for this article came to me in late June 2014 when I read about the news related to the National Higher Education Fund Corporation (PTPTN), especially related to defaulters and the fact that 50,000 new applicants to PTPTN loans may be turned down due to the lack of fund because of the high rate of defaults.

The first version of my article was deemed to be too “academic” with too many facts and figures and hence I went back to the drawing board to work on the second version which was accepted for publication. I have reviewed and edited the first version which is published here. I shall leave it to the wisdom of my readers to judge if this version (which differs substantially from the one published in The Heat) provides a deeper analysis of the issue of student loan crisis in Malaysia and its analogy with the same issue in the USA. 

In November 2014, PTPTN announced a drastic reduction of loan amount to new applicants which trimmed 5% off the maximum loan quantum for borrowers from public institutions of higher learning but levied a massive 15% reduction in the maximum amount of loan for those studying in private institutions. The mean-testing criteria have also been tightened up further. These proved that my prediction in August 2014 was right on the bull’s eye!


Malaysia’s looming student loan crisis

In 2012, USA’s outstanding student loan shot over the psychologically important US$1.0 trillion mark. In March 2014, US News reported that this figure has breached US$1.1 trillion. This is significant because by 2012, the total amount owed by United States’s student loan borrowers had exceeded the country’s citizens total credit card debt. Many financial experts are now saying that the US student loan crisis is getting to the dimension of the sub-prime mortgage crisis of 2008. With a total of over 37 million borrowers holding outstanding student loans, 6.8 million (or 18.4%) of whom being defaulters who collectively account for US$95.9 billion it is no wonder that alarm bells are ringing in the USA.

Table 1: Comparison of student loan data between Malaysia and the USA
Malaysia USA
1 Total amount of student loan disbursed (1997 to 2014) RM54,510,000,000 N/A
2 Total amount of outstanding student loan (2014) RM49,390,000,000 $1,100,000,000,000
3 Amount of student loan in default RM1,300,000,000 $95,900,000,000
4 % of total loan in default [(No. 5 / No. 4)*100%] 2.63% 8.72%
5 Total number of borrowers (1997/2013) 2,390,000 N/A
6 Total number of borrowers still with outstanding loan (2013) 1,240,000 37,000,000
7 No. of defaulters (2014) 183,000 6,800,000
8 % of borrowers who defaulted (2014) [(No. 7/ No. 6)*100%] 14.8% 18.4%
9 Underemployment rate of graduates 40% 44%
10 Repayment rate (2012) (RM7.83 billion due, RM3.48 collected) 49.07% N/A
11 Amount of total loan recovered (Mar 2014) RM5,120,000,000 N/A
12 Repayment collected (2011) RM737,000,000 N/A
13 Repayment collected (2012) RM800,470,000 N/A
14 Repayment collected (2013) RM1,200,000,000 N/A
15 Average debt owed per defaulter (No. 3 / No. 7) RM7,104 $14,103
16 Average amount of loan taken by each borrower (No. 1 / No. 5) for Malaysia; (No. 2 / No. 6) for USA RM22,808 $29,730
17 Total National Debt (July 2014) RM543,236,000,000 $17,806,000,000,000
18 % of PTPTN outstanding loan as national debt [(No. 2 / No. 17)*100%] 9.09% 6.18%

If we take a look at the statistics for Malaysia’s National Higher Education Fund Corporation (PTPTN) loans and compared these with the equivalents in the USA (Table 1), there are worrying indications that Malaysia is heading the same path as the USA towards student loan crisis. Between 1997 and 2013, PTPTN had provided RM54.51 billion loan to 2.39 million borrowers. To put things into perspective, the total amount of outstanding PTPTN loan currently is around RM49.39 billion and every year PTPTN disburses around RM5.0 billion to over 200,000 borrowers. The best year of loan repayment that PTPTN has recorded was 2013 at RM1.2 billion. In simple arithmetic, discounting defaulting loans, the total outstanding PTPTN loan will grow at least RM3.8 billion each year. In comparison, the dividend paid by Petronas to the Malaysian Government has been around RM30.0 billion each year (for 2013 it paid RM27.0 billion). Thus what is owed to PTPTN is about RM20.0 billion more than what the Government of Malaysia receives each year from Petronas.

The average amount owed by undergraduate borrowers in Malaysia, at RM22,808 is comparable to the USA’s figure of US$29,400 if one takes into consideration of the much lower cost of higher education in Malaysia.

Table 2: Statistics of PTPTN Borrowers: the unexplained reduction in numbers
Item Number
1 Total number of borrowers (between 1997/2013) 2,390,000
2 Total number of borrowers still with outstanding loan in 2014 1,240,000
3 Number of borrowers who have settled their loans (based on calculation: No. 1 minus No. 2) 1,150,000
4 No. of defaulters (2013) 412,245
5 No. of defaulters (2014) 183,000
6 Reduction of defaulters between 2013 & 2014 (No. 4 minus No. 5) 229,245
7 Number of borrowers actively servicing their loans (2014) 956,018
8 Number of borrowers unaccounted for in 2014 (after deducting no. of known defaulters, active borrowers from total no. of borrowers with outstanding loans) (No. 2 minus No. 5 minus No.7) 100,982
9 Amount of loan repaid by borrowers in 2013 RM1,200,000,000
10 Total amount of loan recovered (up to 2014) RM5,120,000,000
11 Amount of loan attributed to the reduction in number of defaulter between 2013 & 2014, assuming the average owed is the same for the 2014 defaulters, RM7,104. (No. 6 * RM7,104) RM1,628,516,393
12 Estimated amount owed by the unaccounted borrowers, assuming the average owed is the same for the 2014 defaulters, RM7,104 (No. 8 * RM7,104) RM717,358,470
13 Total amount of loan from unaccounted borrowers (based on average default amount per defaulter in 2014) (No. 11 + No. 12) RM2,345,874,863
14 Amount of loan attributed to the reduction in number of defaulter between 2013 & 2014, assuming the average owed iby individual borrowers in 2014, RM22,808. (No. 6 * RM22,808) RM5,228,512,531
15 Estimated amount owed by the unaccounted borrowers, assuming the average owed by individual borrowers in 2014, RM22,808. (No. 8 * RM22,808) RM2,303,150,134
16 Total amount of loan from unaccounted borrowers (based on average owed per borrower in 2014) (No. 14 + No. 15) RM7,531,662,665

With 14.8% (or 183,000) of the 1.24 PTPTN borrowers holding outstanding loan being defaulters (a higher figure of 19% was reported recently), the default rate is fast approaching the US level. Although only 2.63% of PTPTN’s outstanding loans (or RM1.3 billion) are in default, which is about three times less than that of the USA (at 8.72%) the confusing data provided by the relevant authorities in Malaysia at different times points to a possibility of a much higher default figure (as shown in Table 2). Based on data released to the press in April 2014, there was a dramatic reduction in the number of defaulters from 412,245 in 2013 to 183,000 in 2014, a staggering fall of 229,245 borrowers. No explanation has been given to this fall in defaulters. Basing on the average amount owed by defaulters in 2014 of RM7,104, these 229,245 “rehabilitated” borrowers should account for around RM1.63 billion of outstanding loan and the collected amount (assuming that each borrower opted for the 10 years tenure, excluding interest) should be at least RM163 million. If we base our calculation on the average amount owed by a borrower in 2014 of RM22,808, these figures shall change to RM5.23 billion and RM523 million respectively.

Accordingly, there is also another discrepancy in the figures given relating to the number of borrowers actively servicing their loans. In April 2014, it was revealed that there were 956,018 borrowers active in repaying their PTPTN loans and the total number of borrowers with outstanding loans was given as 1.24 million. If we take away from this 1.24 million people the number of defaulters and the recorded number of borrowers actively repaying, there are strikingly 100,982 borrowers unaccounted for. Granted some of these people could have been the top students with first class honours degrees whose loan have been converted to scholarships, in reality producing over 100,000 first class honours graduates who are also borrowers in one year is stretching one’s imagination a bit too far. These 100,982 unaccounted borrowers could be responsible for between RM717 million to RM2.30 billion of loan, if we assume they owe an average of between RM7,104 to RM22,808 (based on the borrowers data for 2014 in Table 1).

Hence the total unaccounted borrowers collectively could owe PTPTN between RM2.35 billion to RM7.53 billion, either of which is a very huge number that dwarf the loan repayment collected in 2013 of RM1.2 billion. Somehow this fact has escaped the attention of the Auditor General office which has uncovered system problems in PTPTN but this alone could not explain the huge number of borrowers unaccounted for.

The amount of student loan owed and the default rate are tied fully to the employment status of the borrowers. In the USA, it was estimated that around 44% of graduates are underemployed which means that they are not in jobs that are relevant to their training and thus not earning sufficiently. In Malaysia, the figure of 40% underemployment has been given for fresh graduates. Hence being underemployed and therefore not earning one’s full potential is the most crucial factor leading to student loan default. Will this lower pay affect the repayment of PTPTN loans? Will this be the trigger to higher level of PTPTN loan default?

PTPTN will need at least RM5.0 billion per year to cover the loan demand of Malaysian students. Assuming that the collection of repayment stays at least RM1.2 billion as per 2013 data, and the default amount stays at 2014 level of RM1.3 billion, the RM5.0 billion will not be enough to cover the needs of new students. Will we see a cap to the amount of PTPTN loans?*  Will the private higher education sector bear the brunt of the cut in PTPTN loan funding? How will the private institutions, especially those with high reliance on PTPTN funding for their students fare?

The percentage of national debt accounted for by student loan debt is about 6.18% for the USA. For Malaysia, the figure is about 9.09% of total national debt. Thus if the USA, at 6.18% of national debt is close to having a financial crisis, how will Malaysia fare with closer to 10% of national debt accounted for by outstanding PTPTN loan?

With all these indicators, one cannot help but surmise that there is indeed a looming PTPTN loan crisis in the same dimension as that of the USA. The sooner that every stakeholder recognizes this as a pressing issue, the faster can a plethora of solutions be implemented.

*This article was written in mid July 2014. In fact in early November 2014, PTPTN has announced a 5% reduction in loan amount for borrowers from public institutions of higher learning while their private institutions counterparts have to endure a massive 15% reduction in loan amount. More stringent mean-testing measure was also announced.

The profile of student loan borrowers

US News reported in March 2014 that although the bulk of the loan in the US (60%) are for borrowers taking undergraduate courses, a worrying trend is that the remaining 40% is owed by graduate students who account for only 16% of the number of borrowers. The average owed by 70% of those graduating with an undergraduate degree in 2012 was US$29,400, in contrast the amount owed by the average graduate student was US$57,600 with many facing debts of US$100,000 or above.

In contrast, most Malaysian graduate students are only eligible to apply for PTPTN loans if they enroll in public universities and a handful of private universities.  In addition, different levels of financial support ranging from full scholarships at public and private universities, various government scholarship schemes and jobs as research assistants have diminished the reliance of graduate students on PTPTN. It can be assumed that the bulk of the borrowers of PTPTN loans are for undergraduate studies. An attempt to obtain the percentage and amount owed by borrowers pursuing graduate studies has not been successful. The financing of graduate studies by working adults in Malaysia also traditionally rely on EPF withdrawal, commercial bank loans or own savings. Only those enrolled for part-time studies at public universities and a limited number of for-profit institutions are eligible for PTPTN loans.


What the US experts have predicted regarding student loan crisis

  • There might be a cap to student loan guarantee by the US government. This would spark off a crisis mirroring the sub-prime mortgage financial crisis of 2008. With difficult availability of student loans, colleges, especially the for-profit institutions will find it hard to fill up seats, collapse of the higher education industry could occur.
  • There will be diminished economic productivity from young graduates in the long run as they are spending higher percentage of their income to service student loan debt. This coupled with the 44% US graduate underemployment rate means that the income level of a significant number of borrowers may not be sufficient to cover their student loan repayment fully.
  • The spiraling US college tuition fees over the period between 2001/2 to 2011/12 have seen public universities tuition and other fees rose by 40% and that of private institutions rose by 28%. This coupled with the ready availability of student loan have increased the amount of debt held by each US borrower.
  • For-profit US institutions have only 13% of the total population of students but account collectively for 31% of student loan. Their students also have higher default rate of 22% compared to those studied public institutions. 72% of for-profit institutions produced graduates who earn less than the average high school dropouts. This is a reflection on the market perception of the quality of some of these US for-profit colleges. Many have significant reliance on government-backed student loans to sustain their operation. Corinthian Colleges which has 72,000 students received US$1.4 billion of its US$1.6 billion revenue in 2013 from government funded student loans. It has to sell off all its 85 of its campuses and closing down 12 because of the trouble with government funded student loan issues.

The majority of the predictions above regarding US higher education institutions, especially for-profit colleges may have similar reflections in Malaysia. A PTPTN loan crisis will definitely result in the tightening of the rules regarding the eligibility criteria of borrowers. A squeeze of funding source of PTPTN (coupled with high default rate and relatively low repayment collection) may also curtail the number of for-profit institutions and the type of study programmes that qualify for PTPTN loan. This will lead to a second wave of consolidation of not only the number of for-profit institutions but the types of programmes (as did the tightening of the funding rules regarding nursing programmes a few years ago which resulted in the collapse of a number of smaller private nursing colleges). There is no indication that graduate from for-profit institutions in Malaysia are more prone to defaulting their PTPTN loan. This could be due to the cap in the amount that PTPTN imposes on each type of study programme. There is also no indication that graduates of for-profit institutions earning less than their public university counterparts as shown in the US.

One aspect of the US higher education scene that may not play out in Malaysia is the spiralling of tuition fees. This is a combination of market condition and the way the regulatory authorities and funding bodies exerting tight control over the tuition fees that for-profit institutions are allowed to charge in Malaysia. Additionally, public institutions’ tuition fees level is determined by the Malaysian Government with most degree programmes receiving 90% or more in subsidies to keep these fees low. With PTPTN having a cap on funding for different degree programmes at for-profit institutions coupled with the fierce competition  in the private higher education sector means that most private players (with the exception of the market leaders such as Taylor’s University and Sunway University which can command higher than market rates) will price their tuition fees around the PTPTN capped levels to stay competitive.Thus dramatic rise in tuition fees is not an issue in Malaysia.

Comparison of some effects on student loan defaulters in the USA & Malaysia:

  • US education debt cannot be eased even if one dies or files for bankruptcy. In contrast, PTPTN loan scheme includes loan insurance to cover the loan in the event of the death of the borrower but bankruptcy may not be covered by insurance. PTPTN in 2011 declared that although it has the right to declare defaulters with loan that is over RM30,000 as bankrupts, it has decided not to pursue this route to recover its fund.
  • Since 2004, student debts in the US has increased by 56.8% per person on average but the average salary for young people in USA has in fact dipped by 10%. Fresh graduate salary in Malaysia actually grew by 8% in 2013 but the starting salary is still low at RM2,400 to RM2,800. A fresh medical graduate from a for-profit medical school with a RM300,000 loan for tuition fees will find it hard to pay off the study loan with a starting salary of around RM3,000. But PTPTN’s cap for medical degree programme is RM30,000 per year or RM150,000 for the programme. However, most PTPTN loan borrowers, especially those who have graduated from public universities who are employed should be able to service their study loans. These salary data from Malaysia was collected for fresh graduates entering jobs relevant to their fields of study. The 40% and 44% underemployment of fresh graduates in Malaysia and the USA respectively may limit those trapped in this circumstance to service their student loans adequately.
  • The 6.8 million student loan defaulters in the USA will find that their credit rating drops drastically, they may not be eligible for government jobs. They may not even get their transcripts (which are increasingly being demanded by employers) for them to apply for jobs.  While Malaysian for-profit institutions practice the same withholding of transcripts for graduates who have outstanding bills, they are not bound by any regulation to do the same on behalf of PTPTN to make loan defaulters pay up. PTPTN has been directed not to blacklist a large proportion of the defaulters with credit agencies but it is interesting to see if more defaulters do not pay up will this be one of the measures implemented. [In November 2014 PTPTN did announce the listing of loan defaulters in the credit agency’s blacklist which have since saw an increase in repayment rates by borrowers]
  • Some states in the USA will disqualify student loan defaulters from professional licences such as nursing, some will voke driving licences of defaulters. In Malaysia, PTPTN may not have the power to do likewise but it can work with professional organisations such as the Malaysian Medical Association, The Nursing Board, Institute of Accountants, etc. to come to some arrangements to bar loan defaulters from registering with the relevant boards.

Remedies for treating the problem of student loan defaults:

There have been many diverse opinion on what should be done to alleviate the problem of student loans default in the USA. Student loan “forgiveness” is one of the remedial actions taken in the USA. This has been implemented since 2007 where if a borrower fulfills certain conditions he/she pays back the loan according to how much he/she earns and not how much he/she owes. There is a cap of US$57,500 that can be forgiven in this way but those taking up graduate studies are not subjected to any cap. The cost of this “loan forgiven” scheme initially cost the US Government US$1.7 billion but has since ballooned to US$7.6 billion by April 2014.

Since 1965, the US Federal government have been providing Pell Grant to needy student to enable them to pay for college education. The amount of Pell grant that an eligible person can obtain in 2014 is US$5,730 for a maximum lifetime value for 6 years (i.e. US$34,380). In 2014, Pell grant benefited 9 millions US citizens at a cost of US$33.0 billion. Some believe that extending the Pell grant by relaxing some of the mean-tested qualifying criteria may be one of the remedies.

In comparison Malaysia’s PTPTN does have a “loan forgiven” scheme for borrowers who scored first class degrees to convert their entire loan to scholarships. What this scheme costs so far and how many have been benefited are not available at present. [as of September 2014, PTPTN has converted the loans of 22,150 high achieving borrowers to scholarships, costing the fund RM603.1 million]. However there has not been any other criteria set that will trigger “loan forgiven” by PTPTN. Perhaps “loan forgiven” can be considered for cases whereby certain categories of borrowers for instance those with medical, allied health science or teaching qualifications can be enticed to serve for an extended period in remote areas of Sabah or Sarawak in return for full or partial “loan forgiven” scheme.

There is also an equivalent of Pell grant in Malaysia in the form of Majlis Amanah Rakyat (MARA) bursary and scholarships that it has been disbursing for decades. However MARA scholarships and bursary are provided only for the bumiputera community and are not universally available depending on the financial neediness of the applicants as in Pell grant’s case. Perhaps the Malaysian Government should take a look at Pell grant to ensure the very poor have equal access to higher education?

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