Prime Minister Abdullah Ahmad Badawi today instructed the National Higher Education Fund Corporation (PTPTN) to initiate efforts to get those who took study loans to pay up the outstanding arrears, which stands at a staggering RM7 billion.

"The corporation's management must take steps to recollect the loans disbursed," he was quoted as saying by Bernama .

Abdullah, who is also finance minister, was asked to comment on reports that the fund had accumulated RM7 billion in outstanding arrears over the years, forcing the corporation to borrow RM2 billion from the Employees Provident Fund (EPF) in 2003.

As at Dec 31 last year, the corporation only managed to recollect RM93 million.

"Whatever the reasons of the loan defaulters, the corporation must identify them and try to recover the loans so that the fund does not disappear just like that," said the premier.

"However, if the borrowers really cannot afford to pay back, the matter can be negotiated with the corporation to find the best solution.

"Perhaps, some of the students who took the study loans have yet to get a job, and need time...wait for them to get a job...give them some time, that I understand.

"But even those who have been employed refused to service their loans, that's something which is not easy to forgive. If we're not serious in recovering the loans given out, we'll not get back the money forever," he added

Negotiable rates

Abdullah said if the salary they received was small, the students could negotiate with the corporation to settle the loans at the rate they could afford.

The premier, who according to Bernama appeared visibly upset with the students irresponsible attitude, said the problem of loan repayment should not arise as the facility was made available for their own good.

He said Malaysians should not have such attitudes.

"When they apply for the loans and want to borrow money, they're so insistent, they lobby here and there to get all the support, (but) after completing their studies, they don't want to pay back," he added.