Student loan abolition plan unveiled by PKR Youth chief
PKR Youth chief Kamil Munim proposed abolishing student loans in three stages, starting with replacing PTPTN loans with fixed grants from 2027, according to his plan published on Free Malaysia Today.
Source: Free Malaysia Today · August 19, 2026 at 12:31 AM · AI-assisted report
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KUALA LUMPUR, 19 AUGUST 2026 —
PKR Youth chief Kamil Munim proposed abolishing student loans in three stages, starting with replacing PTPTN loans with fixed grants from 2027, according to his plan published on Free Malaysia Today.
Market Impact
Under the first stage, the government would stop issuing new PTPTN debt and replace it with a tuition voucher that students could use to enrol in any public or private university. Universities would compete on programme quality and student experience rather than price, while private institutions could top up fees above the voucher amount or offer basic programmes at the voucher fee.
Kamil said private universities would benefit from the certainty of steady, guaranteed income and lower marketing costs.
The second stage would address existing PTPTN borrowers. Those who had already repaid their loans would be unaffected. Borrowers with outstanding balances could clear their accounts or switch to automatic salary deductions scaled by income, akin to a progressive graduate tax that would end once the debt was cleared. Kamil suggested exempting teachers and nurses from deductions as a social contribution incentive.
The third stage would finance the shift to grants. PTPTN currently disburses between RM3 billion and RM3.5 billion per year in tuition and living allowances, equivalent to less than 1% of federal operational spending. Kamil noted the government already subsidises PTPTN interest payments by at least RM1 billion annually and periodically bails out the system when repayments fall short.
Additional subsidies such as the PTPTN eKasih free education scheme, first-class fee waivers and STEM funding total nearly RM800 million.
Kamil estimated the net cost could be absorbed within existing spending plans as early as Budget 2027 in October. PTPTN would administer the grants while continuing to manage the Simpan SSPN education savings scheme, which held RM24 billion in deposits as of Dec 31, 2025, backed by a 4.1% dividend payout totalling RM506 million in 2025.