The state of Malaysia’s higher education today is largely due to the privatisation of the sector. This started in 1996 when the Education Act and Private Higher Education Institution Act were introduced.

In 1997, PTPTN, or the National Higher Education Fund, was established. It was formed to provide students with funds to pursue higher education. This allowed the rapid growth of private institutions of higher learning. In 2007, the amount of PTPTN funds disbursed to private institutions surpassed public institutions for the first time and this has continued until today. In 2015, RM2.5 billion was disbursed to private institutions compared with RM1.7 billion for public institutions.

Expert Market, a website, compared tuition fee data of Quacquarelli Symonds’ Top Universities for the academic year 2014/2015 and the Gallup Median Self-Reported Income report data in 2013, which revealed that the average tuition fee cost in Malaysia was US$18,000 (about RM80,433).

The percentage of salary spent on tuition fees in Malaysia was 55%. By comparison, the percentage was 73% for Chile, 53% for the US, 42% for the UK, 36% for Singapore and 18% for Japan. The government has responded that this does not reflect fees for public universities but if one compares it to the average fees of private institutions, it makes sense.

At the same time, the government severely cut spending for public universities. In the 2016 budget, the allocation was cut by RM1.4 billion or 27% compared to the previous year. The allocation for scholarships, bursaries and educational assistance was cut by RM812 million or 23%. Thus, poor students who depend on these grants suffered immeasurably.

For the following year, the total allocations for the 20 public universities were cut from RM7.57 billion to RM6.12 billion (19.23%). Unsurprisingly, places in public universities became scarcer. The Keadilan Higher Education Advisory Panel — of which I was a member — received numerous complaints of excellent students not getting the university courses they applied for due to this trend.

Thus, students seeking higher education opportunities in Malaysia increasingly find that the opportunities are more likely available in private institutions — which are more expensive. Unfortunately, some private institutions see PTPTN as an opportunity for them to get “easy money” from the fund, while PTPTN bears the risk of collecting the debt from the students when they graduate.

As many students grapple with unemployment (not having a job), underemployment (having a job that pays below the expected wage of a graduate), low and stagnant wages in general, and the high cost of living, PTPTN repayment rates remain low.

In 2015, the unemployment rate for those with tertiary education was 3.8%, compared with 1.8% for those with only primary education or no formal schooling. From 2011 to 2015, PTPTN’s accumulated losses reached RM6.5 billion. In 2015, unpaid PTPTN debt for the year reached RM8.49 billion. The repayment rate was only 46.6%.

In order to overcome this, PTPTN has employed various methods. This includes listing borrowers under the Central Credit Reference Information System (CCRIS), which affects the chances of errant borrowers in getting housing and hire purchase loans; blacklisting the passports of errant borrowers; no longer providing full PTPTN funding; and encouraging the withdrawal of EPF savings in order for graduates to make payments.

Listing borrowers under CCRIS and encouraging the withdrawal of precious retirement funds are counter-productive, and only pushes poorer borrowers into a vicious cycle. Instead, I would argue that repayment should only be made after earning a minimal salary — as is done in the UK and Australia — say, RM4,000 a month.

In the long term, however, it is clear that PTPTN is not sustainable. The solution is free higher education for public universities. After all, this is not a pipe dream — it is already a reality in Finland, Sweden, Norway, Germany and Scotland. Chile is introducing a policy that will provide free higher education for half of the poorest 50% of its students in 2016.

In addition, poor students should be given a monthly living and accommodation allowance. In 2013, it was estimated that introducing such a policy in Malaysia would cost the country RM5 billion a year.

We should phase out the Public Service Department (PSD) and Mara undergraduate scholarships overseas. This policy made sense when the country was lacking in universities in the 1970s and 1980s, but not today. After all, many PSD scholars are allowed to migrate overseas after their university studies without paying a single sen to the government. Would it not be better to invest in our local public universities instead?

We should also build more public universities to reduce the demand for private institutions of higher learning. This will reduce the numbers of fly-by-night private institutions and allow only the best to survive. At the same time, we can take a leaf from Germany’s experience in making free higher education possible by ensuring that technical and vocational education is equally attractive to avoid a glut of university graduates in the market.

Nik Nazmi Nik Ahmad is the Selangor executive councillor in charge of Education, Human Capital Development, Science, Technology and Innovation as well as Parti Keadilan Rakyat Youth Leader

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