Education

50 posts

PTPTN deficits is a ticking time bomb that needs to be addressed before it explodes

Media Statement by Dr. Ong Kian Ming, General Manager of Penang Institute in KL, on the 21st of December 2016

Note: Some newspaper reports on my statements during a PTPTN forum on Monday, 19th of September have been misreported. The recommendation to revise the 1st class waivers for PTPTN loans only applies to students from middle and upper income families. As it clearly states in the full report, 1st class waivers for PTPTN loans for students from low income families should be maintained. In addition, there were many other recommendations that were proposed in the Penang Institute report such as putting in an income threshold of RM3500 per month before one has to repay his or her PTPTN loan that was not covered in many of the newspaper reports)

PTPTN deficits is a ticking time bomb that needs to be addressed before it explodes

Between 1997 and 2015, 2,464,937 loans with a value of approximately RM55.83 billion were approved for students pursuing their higher education studies in Malaysia. While it is undeniable that PTPTN has been an important factor in increasing access to higher education for many Malaysians, the financial hole which PTPTN finds itself in is very serious and will become even more serious moving forward.

According to the PTPTN Annual Reports from 2011 to 2015, the agency had been making profits from 2011 to 2015 (RM18m, RM12m, RM21m, RM109 and RM401m in 2011, 2012, 2013, 2014 and 2015 respectively). Though seemingly encouraging, these positive profits mask serious underlying financial problems. In reality, PTPTN was only able make these profits due to substantial annual government grants, totalling RM6.456 billion from 2011 to 2015. Without the injection of financial support from the government, PTPTN would have suffered losses totalling RM5.894 billion from 2011 to 2015. (See Table 1 and Figure 1 below)

The amount of government grants has almost doubled from RM915 million in 2011 to RM1.715 billion in 2015, mostly to cover the growing interest payments which PTPTN has to pay out to banks and the EPF for the money it has borrowed from them. To give a picture, interest servicing costs as a percentage of total expenses reached a high of 81.5% in 2011 before coming down to 75.5% in 2015. Interest servicing costs reached a high of RM1.519 billion in 2015 (Figure 2 below).

Penang Institute is proposing 9 recommendations to address the financial problems faced by PTPTN.

(i)               Conduct a comprehensive survey of PTPTN loan holders to accurately identify the reasons for the low repayment rate

This survey, which would be carried out by an independent survey firm, would collect data on the financial patterns of fresh graduates, such as the distribution of starting salaries, the type of jobs held vis-à-vis qualifications, other loan obligations besides PTPTN, daily and monthly expenses such as rent and other types of expenditure. The 2015 survey commissioned by PTPTN involved a very small sample of 200 respondents and did not include crucial information such as starting salary, type of course and the type of the IPTA or IPTS.

With more concrete data, PTPTN would be better-placed to introduce new policies such as income contingent loan repayments, variable interest rates and means tested loans (see below). Going a step further, the Ministry of Higher Education would be able to evaluate important trends such as completion rates in individual colleges and universities, as well as starting salaries of fresh graduates by course and individual colleges and universities. Overall, this would help in better planning for the higher education needs of the country moving forward.

(ii)              Loan repayments should be contingent upon income

To ensure that low income earners are not excessively burdened by PTPTN loan repayments, graduates should have the option of repaying their PTPTN loans only if their monthly income exceeds a minimum amount, at say RM3500.[1] On top of this, monthly payment instalments could be capped at a percentage of borrower’s income, say 10%. (Those who earn below this income threshold but who want to start repaying their loans should be allowed to do so).

(iii)            Removing / Reducing Interest Rate Subsidies

Currently, PTPTN charges a 1% annual interest rate on its loans under the Ujrah repayment scheme. This is far below the 4% interest rate on government housing loans borne by civil servants. The interest rate subsidy on PTPTN loans should be reduced or removed completely. Coupled with the income contingent payment, this would make PTPTN loan repayments more equitable as even if the loan holder is charged a higher interest rate, he or she would only need to start repaying once above a certain threshold income. Such policies are already in practice in the UK, where student loan holders are charged differential interest depending on income level.

(iv)            Automatic deduction of PTPTN loan repayments

In order to increase loan repayment rates, repayment should be automatically deducted from the salaries of those graduates who are already eligible to service their loans.  This mechanism is already in place for EPF and SOCSO contributions. It is also a common practice in countries like Australia where automatic deduction amounts are adjusted according to the amount of salary earned.

(v)              Means testing PTPTN loans

Currently, the amount of money that an individual can borrow from PTPTN is contingent on his or her family income. For example, a student from a family with household income exceeding RM800 a month would be able to borrow up to 50% of the maximum loan amount. But this is still not proper means testing. Students with parents earning over RM20,000 a month, for example, would still be eligible for a PTPTN loan. PTPTN loans should be properly means tested so that those above a certain monthly income threshold e.g. RM10,000 should not be eligible to take out a loan.

(vi)            Reducing / Removing 1st class honours waivers and discounts for PTPTN loans

1st class honours waivers have cost PTPTN over RM600 million since its inception, while the 10% / 20% discounts on early loan repayment have incurred a further RM300 million. The loan discount is a problematic policy since it benefits the well-off who have the financial ability either to pay off their children’s loans in one shot (20%) or regularly service their loans (10%). The 1st class honours waiver is also problematic since students from middle and high income families are disproportionately represented among 1st class honours holders. To increase its effectiveness, these policies should be revised. For example, the 1st class honours waiver should only be applicable to students from low-income families.

(vii)           Increasing the maximum loan period

Current PTPTN policy dictates that a loan must be repaid within 5 to 15 years. Extending the length of the loan period beyond 15 years would allow struggling loan holders to reduce their monthly repayment obligations and so ease their financial burdens.

(viii)          Shifting some of the loan burden to the private sector

Rather than relying totally on PTPTN to provide student loans, the government should shift part of the burden to the private sector. On its part, the government can provide loan guarantees similar to the My First Home financing scheme for first time homebuyers, whereby 10% of the total loan amount is guaranteed by CAGAMAS.[2]

(ix)             Consider a larger reform of the higher education sector

While the paper has focused directly on PTPTN, the government’s strategic plans concerning higher education also have a significant impact on the agency’s financial position. For example, the government envisions a rapid expansion in the number of students in IPTS but it has given little thought as to how these students will fund themselves, and the likely impact of this increase on demand for PTPTN loans. An attempt to address PTPTN’s underlying problems should incorporate a fundamental review of the current Higher Education Blueprint, including re-examining the balance between IPTA and IPTS students, their respective funding models and assessing the quality of these higher education institutions.

Will these measures be sufficient to address PTPTN’s woes? One cannot say for sure but if nothing is done, then PTPTN’s balance sheet will continue to be a ticking time bomb that is just waiting to explode.

Dr. Ong Kian Ming
General Manager of
Penang Institute in KL

(The full report and presentation are available on the website of Penang Institute.)

[1] http://penangmonthly.com/tag/ptptn/

[2] http://www.srp.com.my/docs/html/faq.html

Did the Ministry of Education try to rig the PISA 2015 sample schools in order to artificially boost Malaysia’s scores?

Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 8th of December, 2016

Did the Ministry of Education try to rig the PISA 2015 sample schools in order to artificially boost Malaysia’s scores?

When the Program for International Student Assessment (PISA) 2015 results were released on the 6th of December, 2016, officials from the Ministry of Education (MOE) took pride in the fact that Malaysia’s PISA’s scores for Mathematics, Reading and Science had improved from 421, 398 and 420 respectively in 2012 to 446, 431 and 443 respectively in 2015.[1] No doubt, Ministers, Deputy Ministers and politicians from the Barisan Nasional (BN) will use the latest PISA scores as ‘proof’ that Malaysia is on the ‘right track’ when it comes to the standard of education in the country. What they would have conveniently left out is the fact that Malaysia does not feature anywhere in the 2015 PISA rankings for Mathematics, Reading and Science.

The official reason stated in the PISA report for Malaysia’s non-inclusion is:

“In Malaysia, the PISA assessment was conducted in accordance with the operational standards and guidelines of the OECD. However, the weighted response rate among the initially sample Malaysian schools (51%) falls well short of the standard PISA response rate of 85%. Therefore, the results may not be comparable to those of other countries or to results for Malaysia from previous years.”[2]

Why was it that only 51% of the schools initially chosen for the PISA test participated in the test in 2015? Was it because the Ministry of Education wanted to over-represent students from better performing schools and leave out students from low performing schools? This 51% participation rate raises many suspicions since Malaysia’s participation rate was 99.3% and 100% in PISA 2009 (151 out of 152 schools participated)[3] and PISA 2012 respectively.[4] It is hard to imagine any school principal not allowing his or her school to participate in the PISA 2015 test if the Ministry of Education had already chosen that school to be in the original sample.

One suspects that the Ministry of Education over-sampled the high performing schools in the PISA 2015 sample and excluded some of the lower performing schools from the sample. For example, according to the website of the Negeri Sembilan Department of Education[5], the 14 schools listed as the PISA 2015 sample schools include all 7 (100%) of Negeri Sembilan’s secondary-level High Performing Schools or Sekolah Berprestasi Tinggi (SBT), and all 8 (100%) of its Fully Residential Schools or Sekolah Berasrama Penuh (SBP). The average student from a SBTs or SBPs will clearly outperform an average student from a regular secondary school.

The evidence of a biased sample in favour of high performing schools can also been seen in PISA 2015’s own data on Malaysia.[6] Out of a total sample of 8861 students, 2661 or 30% were from fully residential schools (See Table 1 below). This is clearly an over sampling of students from fully residential schools since they only comprise less than 3.0% of the 15-year-old cohort in 2015.

It is highly likely that those overseeing PISA 2015 saw that the Ministry of Education in Malaysia was trying to rig the sample size in order to artificially boost its scores. Is this why Malaysia was ultimately excluded from PISA 2015 rankings? The Minister of Education should explain so that we are not fooled into thinking that all is well and good in our education system as ‘evidenced’ by the latest PISA scores.

Dr. Ong Kian Ming
Member of Parliament for Serdang

[1] http://www.thestar.com.my/news/nation/2016/12/06/malaysia-sees-improvement-in-pisa-scores/

[2] From PISA 2014 Results (Volume 1), p. 340 (https://www.oecd.org/publications/pisa-2015-results-volume-i-9789264266490-en.htm):

[3] See http://research.acer.edu.au/cgi/viewcontent.cgi?article=1000&context=pisa, p. 103

[4] See https://www.oecd.org/pisa/pisaproducts/PISA-2012-technical-report-final.pdf, p. 181

[5] http://www.spa.jpnns.gov.my/v4/viewpage.php?page_id=1

[6] The document “Codebooks for the additional files for Albania, Argentina, Kazakhstan and Malaysia” (https://www.oecd.org/pisa/data/2015database/Codebook_CM2.xlsx, see the variable named “STRATUM”) states that students in Malaysia’s sample came from the following types of schools

How serious is academic fraud in our universities?

Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 25th of July, 2016

How serious is academic fraud in our universities?

More than a month ago, on the 11th of June, 2016, the Faculty of Medicine at the University of Malaya was alerted of alleged academic misconduct on the part of some faculty members who were authors / co-authors in a number of scientific publications. To its credit, the University quickly convened an investigation and found that ‘there were duplication and / or manipulation of almost all the figures (images and graphs) within the original Scientific Reports paper and across three other publications authored by the group of researchers” and called for the authors to retract all four articles.[1] The articles were subsequently retracted by the journals in question.[2]

The university’s quick and decisive action sends a strong signal that research fraud is not tolerated in our national research universities and it should be applauded accordingly. But larger questions regarding academic integrity and academic fraud remain unanswered.

For example, this specific case of academic fraud was discovered not by an internal probe within the university but because of scrutiny by academics and researchers from outside the country. The allegations which were first highlighted on twitter was then picked up by blogs such as Microbiome Digest, For Better Science and Science. Elisabeth Bik, a Stanford researcher who recently co-authored a paper titled “The Prevalence of Inappropriate Image Duplication in Biomedical Research Publications”, suggested on Microbiome Digest that not only were the images duplicated within each paper, but that the figures look very similar across papers (despite the papers being about different cancer cells and different compounds!). Without such scrutiny, would this academic fraud have been discovered?

In addition, were the authors in all four papers (other than Nina Samie who was the lead author in all of the papers) aware that the same study was replicated thrice and submitted to four different journals under different titles? Was there academic fraud not just in terms of the content published but also in the manner in which the different co-authors may have been duped or worse yet, were complicit partners in this scandal?

What is disconcerting is that this specific case may be the tip of the iceberg of what is poor academic integrity and honesty in our higher education system. While I believe that a large majority of the 3823 papers which were published by UM students and staff in indexed journals have been done with academic integrity and honesty,[3] it only takes a few bad apples to spoil the barrel.

I have heard of instances of junior faculty and researchers being forced to include the names of their supervisors on academic papers even though their supervisors did not contribute any significant intellectual input or work. Some supervisors even insist of being named as first author which implies that he or she took the leading role and did much of the work for the publication in question. In some worse cases of academic fraud, some senior academics even refuse to allow the junior faculty or researcher to put their name in the publication thus claiming all the intellectual credit for himself or herself.

It is not sufficient for UM to merely issue a press statement on this specific instance of academic fraud. As the oldest and arguably most prestigious academic institution in Malaysia, it should take a leading role when it comes to upholding standards of academic integrity and intellectual honesty. As such, I call upon the University of Malaya to publish the full proceedings of its internal investigation into this matter and to recommend changes to existing guidelines so these kinds of cases do not happen again. In addition, UM should also disclose the exact nature of the punishment meted out to the researchers in question so as to send a strong signal to other faculty of the serious consequences of academic fraud.

In addition, I call upon the Minister of Higher Education, Idris Jusoh, to conduct a comprehensive review of the High Impact Research (HIR) initiative between his Ministry and the University of Malaya. The authors of three of the papers received two research grants from this initiative which is a collaboration between the Ministry of Education and the University of Malaya to fund projects that will lead to publications in Tier 1 ISI/Web of Science journals[4]. According to the UM 2014 annual report, the Ministry of Education (MoE) has injected RM590 million into the programme, with additional funding from UM, to fund research projects up till 2016. Given the large amount of funds dedicated to this initiative and that the fact that two of its research projects were found to be academically fraudulent, it is in the public interest for the funding for all the projects under this initiative to be publicly disclosed and reviewed. If Idris Jusoh is serious about ensuring that our higher education system is ‘Soaring Upwards’, he should take this matter seriously and not try to cover things up.

Dr. Ong Kian Ming
Member of Parliament for Serdang

[1] http://www.um.edu.my/about-um/media-centre/news/2016/06/16/allegations-of-scientific-misconduct-at-university-of-malaya

[2] Samie N., Haerian B.S., Muniandy S., Marlina A., Kanthimathi M.S., Abdullah N.B., Ahmadian G. and Aziddin R.E.R. (2016) Mechanism of Action of the Novel Nickel(II) Complex in Simultaneous Reactivation of the Apoptotic Signaling Networks Against Human Colon Cancer Cells. Frontiers in Pharmacology, 6:313. doi: 10.3389/fphar.2015.00313 (Received: 19/11/15 | Accepted: 18/12/15 | Published: 28/1/16 | Retracted: 29/6/16 )

Samie N., Muniandy S., Kanthimathi M., Haerian B.S. (2016) Mechanism of action of novel piperazine containing a toxicant against human liver cancer cells. PeerJ, 4:e1588. doi: 10.7717/peerj.1588 (Received: 17/11/15 | Accepted: 21/12/15 | Published: 17/3/16 Retracted: 26/6/16)

Samie N., Muniandy S., Kanthimathi M.S., Haerian, B.S., Azudin, R.E.R. (2016) Novel piperazine core compound induces death in human liver cancer cells: possible pharmacological properties. Scientific Reports, 6:24172. doi: 10.1038/srep24172 (Received: 1/10/15 | Accepted 23/3/16 | Published: 13/4/16 | Retracted: 22/6/16)

Samie N., Kanthimathi M.S., Muniandy S., Marlina, A., Mohamed Z., Abdullah, N. Revamp of the apoptotic signalling pathways and cell cycle arrest in colon cancer cells induced by novel copper based compound and its molecular mechanisms. Recent Patents on Anti-Cancer Drug Discovery. (Withdrawn before publishing – can no longer be found online)

[3] https://www.um.edu.my/docs/default-source/about-um_document/media-centre/annual-report/annual-report-2014.pdf, p. 28

[4] http://hir.um.edu.my