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PTPTN Borrowers, You Can’t Escape Repayments Anymore (If PGB Happens)

Updated 10 Dec 2018 – By Nisya Aziz


In case you’re not aware of this, our Finance Minister Lim Guang Eng made an announcement at the tabling of the Budget 2019 about the implementation of the Scheduled Salary Deductions or better known as Potongan Gaji Berjadual (PGB) for PTPTN. He mentioned that borrowers who are earning more than RM1,000 a month will have salary deductions from 2% to 15% for their loan repayments. Fuh, a lot of people tak puas hati with this one.

But in recent news, the government seems to have changed its mind for the salary scale. Maybe because many weren’t happy with the previous arrangement when it was first announced. The Education Minister Dr Maszlee Malik shared that this PGB implementation is for borrowers (read: you) with a monthly income that exceeds RM2,000 (like this oso can).

If this were to take effect in January 2019, it means that you can’t escape from repaying your loan anymore leh - a hard pill to swallow, innit? But, so far nothing is confirmed (if you read this article, you’ll know why). Anyway, before you throw any shade, below are some of the things that you need to know about this new PTPTN repayment scheme.
 

So, how does this PGB works?

According PTPTN Chairman, Wan Saiful Wan Jan, PTPTN would work with all relevant agencies such as Employees Provident Fund (EPF), Inland Revenue Board (LHDN), Retirement Fund Inc (KWAP), Immigration Department, Companies Commission of Malaysia (SSM), the Accountant General’s Department (AGD) and Urusan Gaji Angkatan Tentera (UGAT) to obtain information on the salaries and details of borrowers’ employers in order to implement PGB.


Based on the information received, PTPTN will then issue a directive for employers to deduct salaries according to the percentage set (we’ll talk about this in a bit). To encourage employers to do so, the government will qualify them for tax rebates on the repayment amount, depending on whether the borrowers are paying on an instalment or lump sum basis. Having said that, this comes with a condition that the employers CAN’T impose any requirement or demand on the employees after payments have been made.

Meanwhile, to those borrowers who aren’t formally employed (freelancers), if you think you can run away, you’re WRONG. Apparently, you’re required to verify your income information on PTPTN’s website to ‘enjoy’ the repayment facilities according to your incomes. If not, trouble will be your future friend. 

As for the unemployed borrowers, or housewives/househusbands whose spouses aren’t paying because you have no income, Wan Saiful advised you to reach out to PTPTN.
 

Can the employers deduct my salary without my consent?



Actually, without your consent (as a borrower) according to Employment Act 1955,  PTPTN cannot make such salary deductions. This was shared by the Human Resources Minister, M. Kulasegaran. 

However, to clear the air, Wan Saiful explained: “... borrowers had consented in the agreements to make repayments through whatever schemes set by PTPTN, including salary deductions. Section 29 of the PTPTN Act 1997 gives PTPTN the power to order employers to carry out salary deductions on borrowers, therefore the legal provision is there already.”

Additionally, due to many backlashes from left, right, front and back, Maszlee decided that this repayment scheme will be put on hold. He said on his Twitter: “The ICLR PTPTN repayment scheme will be suspended for the time being until we receive the collective inputs and feedback from all stakeholders”.

Adui, how now brown cow? We wait until further notice lorh.
 

Okay, if this happens, how much will PTPTN deduct from my salary?

Good news is if you’re earning below RM2,000, you don’t have to make PTPTN repayment until your salary exceeds the said amount. Also, for those who are earning from RM2,000 to RM4,000, the repayment is actually quite affordable (refer table below). Nevertheless, this could also mean that your monthly commitment will be increased, which isn’t necessarily a good thing. Not only that, but this also goes against the new government manifesto. Yikes!
 
Monthly Salary % Deduction Amount Range
Below RM2,000 Nil Exempted temporarily
RM2,000 - RM2,499.99 2% RM40 - RM49.99
RM2,500 - RM2,999.99 3% RM75 - RM89.99
RM3,000 - RM3,999.99 5% RM150 - RM199.99
RM4,000 - RM5,999.99 8% RM320 - RM479.99
RM6,000 - RM7,999.99 10% RM600 - RM799.99
RM8,000 and above 15% RM1,200 and above

READ: This is Why You Shouldn’t Convert 3% Conventional To 1% Ujrah?
 

Emm… got discount or not?

Of course, there is, but only until the end of this year. This has been on-going since 2017 yo. If you’re paying your loan regularly, you should be getting an email from PTPTN that offers below:



So, if you settle all of your PTPTN loan, you can get 20% off. If you can’t clear your debts, no worries. You’ll still get 10% off if you pay at least 50% of the loan amount; or when you make payment via direct debit or salary deduction.

Long story short, the year is about to end so do take this opportunity to pay your loan before sh** hits the fan.
 

If this scheme takes place, are there any repayment exemptions?


Short answer - YES. If these scheme realised, there are exemptions for PTPTN borrowers (you), if you fulfil these set of requirement:
  • A full-time bachelor's degree students, who complete their studies on time.
  • They also need to graduate with first-class honours in 2019.
  • They need to be a  member of the B40 and M40 income group.
Other than that, if you’re one of those PTPTN borrowers over the age of 60, your loan will be abolished or written off. But there’s a catch. You need to be earning between RM2,000 to RM4,000 a month and has been consistently repaying your loans over the past 3 years before turning 60 years old.
 

Hmm… since the repayment scheme tak jadi, should I still care?

Of course lah you should care if you’re a PTPTN borrower, even though the scheme is put on hold at the moment. The least you can do is to care about paying the loan back and not take advantage of the situation.

Did you know if you keep delaying the payment or buat tak tau, you’ll be subject to the Central Credit Reference Information System (CCRIS) blacklisting? This might affect your credit ratings should you wish to obtain a housing loan in the future. On top of that, there are also other legal consequences such as receiving the court summons or having your assets taken away. Remember this quote? Clever clever squirrel jump, one day fall to the ground also.

If you feel you’re struggling to pay because your many commitments, not earning enough, or if you’re jobless, it’s advisable to talk to the PTPTN officers to resolve your issue. Who knows, you might get a temporary exemption.


Other related PTPTN articles:
 
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