26 March 2008

PSD moves to recover loans

The Star

SEREMBAN: The Public Service Department (PSD) wants all ministries and department heads to submit the names of employees who have taken study loans from the Government.

This is because many have not repaid their loans despite having been employed for several years now.

PSD director-general Tan Sri Ismail Adam said the details of the borrowers, including their place of work, should be submitted by April 7.

“We need to get defaulters to pay up so that others can benefit. Our records show that many loan recipients have either not been paying up regularly or have stopped paying despite the reminders and notices sent,” he said in an interview.

The directive was sent to all ministry secretaries-general and state secretaries on March 13.

It is learnt that some defaulters had not paid a single sen despite having graduated more than 10 years ago. Those who studied abroad were given interest-free loans amounting to RM300,000 but had somehow dodged legal action.

Ismail said the PSD began making deductions from the salaries of its own employees who had defaulted beginning last year and this has helped increase the recovery process.

“Now we want all ministries, government departments and state agencies to help us collect our dues,” he said.

The Government, irked by the attitude of several thousand borrowers who refused to service their loans, had in July last year issued an order that they would not be considered for promotion.

These included those blacklisted by National Higher Education Fund Corp (PTPTN), Mara and other government-linked corporations. However, the response was still poor.

A source said warnings that the 75% discount on the entire loan given to those who scored second-class upper degrees and above would be rescinded had also failed to get them to start paying up.

It is learnt that the defaulters owed the Government more than RM1bil. As of March last year, 438,775 owed the PTPTN some RM920mil.

Since it was established in 1997, the PTPTN has given out RM12.6bil in loans to students for diploma and degree courses.

As for the PSD, about 15,000 borrowers owed it some RM300mil. The amount owed to Mara was RM200mil.

PSD gave out RM3.03bil in study loans to some 145,000 students from 1987 to 2004.

The Higher Education Ministry has identified 40,573 borrowers who are working in government agencies or government-linked companies, who had taken loans from PTPTN.

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