Utm Thesis Template - PTPTN Quality Management
Utm Thesis Template - PTPTN Quality Management
NOVEMBER 2016
TABLE OF CONTENTS
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CHAPTER 1 1
INTRODUCTION 1
1.1 Introduction 1
CHAPTER 2 3
LITERATURE REVIEW3
2.1 Literature Review 3
CHAPTER 3 5
PERBADANAN TABUNG PENDIDIKAN TINGGI NEGARA
(PTPTN) 5
3.1 Background 5
3.2 Issues Related to PTPTN 7
3.3 Solutions 9
CHAPTER 4 17
CONCLUSIONS 17
REFERENCES 18
TABLE OF FIGURES
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CHAPTER 1
INTRODUCTION
1 Introduction
Pre-schools are intended for child ages from four (4) to six (6) years old.
Primary education starts when a child reaches the age of seven years old and entering
to secondary school six years later. Presently, a student shall spend at least 11 years
in their school days before able to enter the tertiary education level after they sat the
public common examination, Sijil Pelajaran Malaysia (SPM). Primary and secondary
schools are under Ministry of Education jurisdiction. Eleven years of pre-tertiary
education in Malaysia is a common practice. However, the Malaysian education
system has been designed to reflect the needs and identity of a multicultural society.
Free education was provided by the Government for six compulsory years in primary
school and five compulsory years in secondary school.
Upon successfully completion of SPM, the student may apply to further their
studies to the higher education institutions. Universities and colleges normally offers
diploma, bachelors degrees, masters degrees and PHDs programmes meanwhile
Polytechnics and Community Colleges offers Diploma or Cetificate in technical and
professional programmes focusing on skills development. Recently, the demand for
higher education in Malaysia is rising due of market needs and surrounding factors
such as peer influence or family background.
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Pursuing tertiary education is not free and as the cost increase due to several
factors, it is important to plan ahead and consider on the options that are available to
finance the education. Well off or high income families may have their personal
savings for obtaining higher education but students from middle income or low
income families might having difficulties in pursuing tertiary education. Some of the
most common financial aid is scholarships, study loans and waiver of tuition fee by
the educational institutions. Scholarships can be considered as free loan (does not
have to pay) meanwhile loans usually comes with interest and there are situations
where loans can be waive and converted into scholarships with certain condition.
There are several sources that can be approach for the funding of higher
education which includes the scholarships from Public Service Department (JPA),
Council of Trust for the Bumiputra (MARA) Education Sponsorships, The STAR
Education Fund, EPF Education Withdrawal Scheme and National Higher Fund
Corporation (PTPTN) loans. There are also private or corporate companies and
Government Linked Companies (GLC) that provides sponsorships such as
PETRONAS Scholarships Programme, Shell Malaysia Scholarships Programme and
Khazanah Nasional Scholarships. However, those sponsorships are usually limited so
only strong academic candidates with outstanding involvement in curricular activities
have higher chances to be sponsored. Besides that there are some sponsorships that
focus for students on certain areas of studies or courses that relevant to their business
nature.
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CHAPTER 2
LITERATURE REVIEW
1 Literature Review
There are various studies related to tertiary education and student loans
however the study related to PTPTN is minimally explore. Tertiary education in
Malaysia has been a key factor in developing the nation (Lindong, 2007; Aafaq,
2007). Economic Planning Unit (EPU) reported that the Government of Malaysia
had proposed national budget allocation of 2009 for tertiary education reaching
RM14.1 billion since it is a fast-growing sector in the economy. From the studies on
tertiary education majority agrees that the contribution of higher education to the
nations well being is undeniable. According to Lee and Levy (2003), Malaysia had
allowed the existence of private higher education long ago without granting it a full
status due of private higher education institutions are profit oriented and the fees are
higher than public institutions.
CHAPTER 3
1 Background
As PTPTN is a loans so minimal interest rate were charge in the payback rate.
According to Zamir Iqbal and Abbas Mirakhor (2007), interest rate is the premium
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that must be paid by the borrower to the lender together with the principal amount.
PTPTN had introduced Ujrah Scheme in 2008 which gives the borrowers an option
to convert their existing interest rate from 3% to 1% per annum. The offer is eligible
for borrowers who maintain with a loan balance as at 1 June 2008 only. Borrowers
have to apply and accept the new contract under Ujrah Scheme in order to convert
the interest rate from 3% to 1%. This scheme was introduces to assists the borrowers
to clear off their debt faster and with less interest. However, PTPTN also provides
repayment exemption or converting the loans to scholarships for their borrowers. It is
only valid for full time students that awarded with First Class Honour Bachelor
Degree.
Today, there are many issues related to PTPTN, one of the common issue is
unpaid loans from the debtors and issues pertaining unsatisfaction on the
enforcement of blacklisting the unpaid borrowers name via cooperation with credit
bureau and Immigration Department.
According to The Sun Daily, 2016 PTPTN had declared that 753,058
borrowers havent made their repayment with total cost approximately more than
RM5b. PTPTN suffers major problem when 60% of the borrowers defaulted on their
payments. PTPTN had collected only RM9.6 billion until 31 August 2016 compared
to the actual fact amount shall be collected is RM18.11 billion. Table 1 explains on
PTPTNs financial performance for seven (7) years from 2003 until 2009. From the
table, clearly shows that year 2009 recorded approximately 50% of defaulted
borrowers in repayment collection although the Government had revised the interest
rate from 3% to 1%. After several years, this is still a common issue in Malaysia
news headlines.
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eligible for full time students. Only borrowers that had obtained their degree scroll
may proceed with the exemption application process. There are several documents
needed to be completed and verified by respective Higher Education Institutions
before it can be submitted at the nearest PTPTN branch by hand. The processing
duration for the application may take up to 60 days but sometimes it took longer than
the expected duration and on the other hand the borrower still have to make their
loan repayment due of the long processing time needed.
PTPTNs payback policy allows the borrower to make their first payment
after six (6) months of graduation in consideration that the borrowers may have
sufficient time for them to settle down after completion study before starts to make
the repayment. Even though PTPTN had taken into consideration several indicator to
ensure inclusivity before the enforcement but those new measure had receive media
coverage and public attention recently due of unsatisfaction. All these measure had
been look as a kind of punishment form the Government and have been critically
criticized.
3 Solutions
created several initiatives to helps borrowers to make their repayment. For instance,
PTPTN is making them more approachable through opening 74 branches nationwide,
restructuring the repayment schedule up to 60 years old, salary deduction or via
Banks standing instruction, repayment through Account II Employee Provident Fund
(EPF) withdrawal and Electronics Data Capture (EDC) Terminal. Even though there
are multiple channels to make the debt settlements but the total amount collected is
still poor.
The cause and effect of this issue has been identified using one of seven basic
Quality Management Tools, the Ishikawa Diagram. Ishikawa Diagram also known as
Fishbone Chart or Herringbone Diagram. It helps in identifies the possible causes
for an effect. Figure 3 explains on the possible cause of unpaid loans by PTPTN
debtors.
The possible cause of unpaid loans by PTPTN debtors can be divided into
management factors, medias role, psychology and communication factors. Poor
management either on the borrowers side or on the PTPTN side might influence the
loan repayment collection. For instance, the fixed amount of monthly payment after
graduation may burden the borrowers life after graduation especially those who
doesnt get appropriate or permanent job according to their academic background. If
a comparison was made among two graduates from the same background of studies
will have to pay the same monthly repayment amount even one of them managed to
get a better job with higher salary compared to the other. In order to overcome this
situation, PTPTN shall take into consideration flexibility of repayment amount based
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on the borrowers monthly income and family financial background. At the first
place, majority PTPTNs borrowers are from middle income and low income
families so even though the borrower is now working he/she might have to supports
their family. Introducing a fixed rate out of borrowers total monthly income can be a
practice. As such, the monthly repayment amount can be charge on 5% or 8% from
borrowers total monthly income. In this case, a borrower who earn RM1,000
monthly income may only have to pay RM50.00 or RM80.00 per month and the rate
of charge can be increase when the borrower earn better income.
PTPTNs poor financial management is one of the factor that affect on poor
recollection issues. PTPTN starts to make a stern decision to the borrowers after
PTPTN having insufficient fund to provide loans can be consider as poor financial
planning. As published in local tabloid News Straits Times (NST) on December
2015, PTPTN could only approved 95% of the new students intake due of
insufficient fund. Since the terms of repayments was stated in the agreement
between PTPTN and the borrowers, PTPTN as the responsible agency must follow
up and start collect the debt repayment from the borrowers within the stated period
and not after facing those problems. Making a stern measure after creating a large
batch of borrowers reluctant to pay their debt would not easily settle the difficulties.
PTPTN should have a systematic tracking system to helps them to identify names of
borrowers who had completed their studies and started to send reminders on the
borrowers responsibility when it reach six months upon graduation. Failing to
implement an effective and efficient payment collection and tracking system may
reduce the interest of the borrowers in making the payment.
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Media also plays important roles in influencing the debt recollection. Media
electronics and social media is a trending in supplying information to publics. The
quick accessibility to media makes it as an important tool in delivering messages and
information. Based on the effectiveness of these sources and its engagement with
young people, PTPTN shall cooperate with those media is spreading the information
thus helps for behavior change among the borrowers. According to a study by
Volkwein and Alberto (1998) show that students realize that loan repayment is
needed, so misinformation cannot be a factor in loan defaults. Awareness among
borrowers on the importance of the repayment in rolling the fund for future and how
the money being handle to ensure the cycle sustain is important to earned the
repayment. Lack of awareness on those issues may lead to misinformation and
ignorance among the borrowers.
PTPTN offers a free education for those excel in their studies through the
exemption of repayment offer. The exemption is only valid for those obtain First
Class Honour Bachelor Degree, however the exemption was not given automatically
after obtain excellent result in the University. There are some documents and
procedure to follow for the exemption. Figure 4 explains on the process of
application for exemption of PTPTN loan repayment.
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Lam (1996) founded that major problem to the use of quality management
tools is lack of ability in solving quality problems. By eliminating unnecessary
procedure such as submitting certain verified documents to PTPTN after obtaining a
scroll maybe tedious procedure and time consuming. Those unnecessary procedure
can be eliminate by having a reliable database on borrowers personal details
including their name, university attended, course enrolled and period of study will
simplify the process of identifying qualified borrowers for repayment exemption via
engagement and cooperation from the public or private higher education institutions.
By implementing the proposed mechanism, it will shorten the time for PTPTN
response to the exemption status.
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CHAPTER 4
CONCLUSIONS
With the rising cost of tertiary education, PTPTN is important and needed by
the nation. Since our country is not ready yet to provide free tertiary education so it is
important for PTPTN to take the appropriate measure to move forward. PTPTNs
priority now is not only on loans disbursement to deserving students but also to go
after the defaulters for payment therefore identify and practicing the most suitable
strategy is a good move. The proposed repayment collection and repayment
exemption mechanism could strengthen PTPTNs procedures in collecting the loans
effectively. The Ishikawa Diagram had explains what the sub causes and causes that
brings on poor repayment collection. In achieve healthy collection, reviewing on the
collection mechanism will ensure stakeholders and customers or in this context its
the borrowers satisfied. As quality is referring to how close a product or service
characteristic meets the needs and expectation, understanding on what are the
customer expectation and situation can build better service quality. Although,
customer are referring the borrower but still they play an integral role in the overall
lending cycle.
The measurement of TQM principles and core concepts, which are critical
success factors may reflect performance of an organization. As explained by Kanjis
Pyramid Model, 1996 an organization must ready for continuous improvement in
order to achieve high customers satisfaction. Implementing the quality management
principles will helps in increased customer value, increased customer satisfaction
besides building the organization reputation so it was the best tools for PTPTN to
consider based on current situation. Any changes in the business process may reflect
the organization performance and improve the organization business excellence.
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REFERENCES
Dr. Russayani I., W.R.Fadzim (2009). Financing Education Are There Alternatives
To Student Loans, Seminar Ekonomi Islam Peringkat Kebangsaan (SEIPK).
Shafinar Ismail, Antoaneta Serguieva and Satwinder Singh, (2011). Integrative model
of students' attitude to educational loan repayment. Journal of International
Education in Business, Vol. 4, Iss 2, 125 140.
Christos Fotopoulos Evagelos Psomas, (2009). The use of quality management tools
and techniques in ISO 9001:2000 certified companies: the Greek case",
International Journal of Productivity and Performance Management, Vol. 58
Iss. 6,564 - 580
Centre for Public Policy Studies (2005), Achieving Higher Performance in Tertiary
Education. Retrieve November 11, 2016, from
www.cpps.org.my/sub_page.aspx?catID6&ddID354
http://www.ptptn.gov.my/web/guest/anjung
http://www.epu.gov.my/ms