PTPTN student loan: No more full-scholarship conversion for first class degree holders. Automatic loan deduction between 2% to 15% for fresh-graduates earning RM1000 and above.

These are the two of the most important highlights of PTPTN during the presentation of Budget 2019.

Well, it seems like there is no running away from it anymore, eh? No matter the outcome, the new government has enforced a way to ensure Malaysian students pay back their PTPTN loans.

The thing is, while we can definitely spend our time on social media to play the blame game, we might as well put our mind together to figure out a solution for those who are impacted by this, yes?

So here it is! Here are some ways that you can (or still can) repay your PTPTN loan faster and more effectively under the new changes in Budget 2019:

Now You Can…

(1) Get Your Employer to Repay the PTPTN Loan on Your Behalf

With the newly announced Budget, any company that settles their employees’ PTPTN loan will be offered a tax break.

That said, this tax break will only apply to loans that are settled by the end of 2019.

Hence, if you are working and there is still a loan balance, or if you are graduating before the end of 2019, it is best that you take advantage of the tax break window.

Take the initiative to negotiate or look for a company that would help pay off your PTPTN loan. The best bet for this strategy to succeed is none other than to offer value to the company where you are working or applying to.

(2) Get First Class and Qualify for PTPTN Loan Rebate

For students under the B40 background, you are still qualified for a loan rebate if you graduate with First Class.

While this differs significantly from a full-scholarship conversion, it is still a legit way to reduce your burden in repaying the loan once you started working:

[A RM30,000 PTPTN loan payable in 15 years at 1% fixed interest would cost you RM191.67/month. Meanwhile, a 30% discount means your total loan would be RM21,000 and it would cost significantly lesser at RM134.17/month!]

And need I not tell you that your total interest paid by the end of payment period would be RM3150 compared to RM4500?

You Still Can…

(3) Enjoy Up to 20% Discount on Loan Settlement

While there will be no more discount on loan settlement starting 2019, those who are still currently owing their PTPTN loan should repay the balance before the end of 2018 to enjoy up to 20% off the balance. (Source: The Star)

You Should…

(4) Apply for Your University’s Tuition Fees Discount/Waiver* & Start Investing! (*Source: Lite)

An extra financial support during your university times will always come handy. This means that you can now save up more (not spend more) and invest the money!

My suggestion in terms of the priority of where to invest your savings are as follow:

  • Financial education – If you have extra savings, it is always best to start investing in your financial education as the top priority. Learn how to invest before you graduate!

The knowledge of compounding return will always triumph any kind of short-term Fixed Deposit gains in the long run.

  • Invest in the Stock Market – Once you have gained the knowledge on investing, apply it and invest it in the financial market such as stocks!

Invest in a fundamentally sound company at the right timing will allow you to earn a decent return via capital appreciation and dividend income. As a start, I would recommend investing in less volatile stocks such as Real Estate Investment Trust (REIT) that pays a decent dividend between 6% to 8% annually.

6% to 8% dividend annually. You do realize that the interest rate for PTPTN loan is fixed at just 1% annually, right?

  • Fixed Deposit (FD) – My least favorite way to grow savings. But still, at an average return of 3% annually, it is better than putting your savings in any standard savings account.

(5) Develop Side Hustle(s) While You are still Studying

Another solid way to ease your burden in paying off your PTPTN loan is to develop one or multiple side hustles while you are still studying.

Start a business. Offer to teach people what you know. Monetize on your passion.

Who knows? By the end of your university life, you might already have all the fund needed to clear your PTPTN loan!

No Money Lah Verdict

Depending on your status (graduate or current student), there will be a solution that suits your situation in this article. My wish is that we stop finger-pointing. Instead, we should start to think of ways to support each other in the matter of PTPTN loan.

Do you have any personal experiences or tips on PTPTN that you would like to share? Let me know by leaving a comment at the very end of this article!

I cannot wait to hear from you!