Prime Minister Anwar Ibrahim appeared to have given his blessings to the scheme, describing it as not only practical but one that would not burden the borrowers.

“It would also give an incentive to the individual and employer to repay the loan and encourage borrowers to do their civic duty in helping underprivileged students,” he said in a speech at the higher education ministry’s open day in Putrajaya. The speech was read by deputy prime minister Fadillah Yusof.

Anwar, who is also the finance minister, said that one of the biggest challenges the government has faced was to guarantee continuous funding for education. PTPTN is currently the biggest contributor, allowing many people to further their studies.

However, there was a low rate of loans being settled. Defaulters still owed a total of RM66.9 billion, which if paid could be used to benefit some 2.5 million students.

“We are worried that this (outstanding debt) would have an impact on the revolving fund’s sustainability in the long run,” he said.

The proposal for the salary deduction scheme comes 10 days after Putrajaya offered defaulters a discount of 10% to 15% from Oct 14 to March 31 to encourage defaulters to repay their loans.