Madeline Berma, an honorary professor at Universiti Malaysia Sarawak in Kuching, said the PTPTN loan discount would be hugely beneficial as it increased youths’ disposable income, which could then be used for groceries, insurance, rent, transportation, utilities, education and even leisure.

“Given the large number of youths, their spending will help to generate economic growth. It will reduce their debt and loans while also encouraging and incentivising youths to repay their PTPTN loans,” she said.

Berma added that this would also enable PTPTN to give out more loans, pointing out that the money owed to the education fund was almost equal to the losses incurred in the 1MDB scandal.

On top of the PTPTN discounts, Yeah Kim Leng of Sunway University said the Bantuan Keluarga Malaysia (BKM) cash aid would also be helpful in increasing the disposable income of the youth.

He told FMT that these initiatives were crucial following the pandemic, as there were multidimensional and complex problems facing today’s youths.

“More importantly, every initiative should be continuously evaluated for its effectiveness so that those with the largest impact can be expanded,” he said.

In announcing the budget, finance minister Tengku Zafrul Aziz announced that a rebate of between 10% and 15% would be available to PTPTN borrowers from Nov 1 to April 30.

This includes a 15% discount on the outstanding balance for the full settlement of the loan, a 12% discount for the repayment of at least 50% of the outstanding debt, and a 10% discount for repayments through salary deductions or direct debit.

Tengku Zafrul also announced the new BKM scheme, with singles earning less than RM2,500 a month eligible for a RM350 handout.

Meanwhile, households with at least three children and earning less than RM2,500 a month would receive up to RM2,000, while those taking home RM2,501 to RM5,000 can receive RM800.